INSURANCE companies generated investment income of £235 million in 1995 on funds held to cover claims, according to the Blue Book. on the insurance industry. Issued yesterday by the Department of Enterprise and Employment, the Insurance Annual Report 1995 reports investment income on provisions for the first time.
Investment income meant that insurers were able to report profits on motor insurance business. Investment income of £141.8 million offset an underwriting loss of £40.7 million on motor business.a This meant that insurance companies reported profits of £101 million on this category of business despite the fact that claims and costs exceeded premium income by just under £41 million.
However, despite the underwriting loss on motor business the trend was better with the loss down from £47 million, or 8 per cent of net premium income, to £41 million, or 6.7 per cent of net premium income.
Over all the categories of business, investment income of £234.8 million offset total underwriting losses of £97 million, resulting in profits for the insurers of £137.7 million. The 1995 underwriting loss of £97 million, or 8.7 per cent of net premium income, compared with a loss of £61 million, or 5.8 per cent of net premiums in 1994.
Despite a better underwriting performance on motor business, overall underwriting losses increased. This was mainly due to increased losses on fire and property insurance after storms early in the year and a deterioration in liability business.
Accident and health insurance was profitable before investment income, with premium income exceeding claim and costs by £5.5 million. Investment income of £1.6 million was generated on the funds held to cover claims in this category of business.
In the fire and other damage to property category, the reported underwriting losses of £7 million. But investment income of £22.7 million allowed the insurers to report profits of £15.7 million. Underwriting loss on this category of business compared with a profit of £16 million in the previous year. On liability insurance losses rose to £54 million, or 25 per cent of net premiums. This compared with losses of £40 million or 20 per cent of net premiums in 1994.
The report shows total non-life premium income of £1.74 billion, up 12 per cent from £1.55 billion. Total net non life premium income for Irish risks, excluding Lloyds business, was £1.1 billion. This compared with a 1994 figure of £1.06 billion.
In the life assurance business, premium income was two per cent lower in 1995, down to £813 million from £828 million. Single premiums, or one off lump sum investments, fell by three per cent
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