Short-tail property categories – including householders, commercial motor, domestic motor, and fire and industrial special risks – contributed an underwriting profit of $271 million. Although this figure represents a decline from the previous quarter's $1 billion, it surpasses last year's $192 million. Notably, householders were the only sector within short-tail properties to post an underwriting loss, with a $190 million deficit, following three continuous quarters of gains.
According to Tim Yip, Director at Taylor Fry, the general insurance industry has delivered a robust outcome overall. Despite the apparent setback in the householders' line, this is consistent with expectations due to seasonal patterns. The March and December quarters typically pose challenges because of cyclone season, spanning November to April, alongside other severe weather risks. The March quarter accounted for damages from Ex-Tropical Cyclone Alfred, resulting in an industry-wide cost exceeding $1.2 billion.
Even with the March-quarter downturn, the year-to-date underwriting result for householders remains positive, tallying a $443 million profit, Yip noted. Remarkably, the December quarter's underwriting profit of $217 million was the first positive performance during that time frame in six years.
Scott Duncan, Principal at Taylor Fry, highlighted that average householders' insurance rates rose by 11% over the year to March, following a 20% hike in the previous year. He emphasized that despite the overarching figures, granular pricing adjustments mean some properties face more pronounced cost pressures. Thus, issues of affordability and accessibility persist.
This financial report underscores both the resilience of the insurance sector and the ongoing economic strain felt in household coverage, with consumer costs remaining a focal point for potential improvements and strategic adjustments in the forthcoming months.
