In KPMG's General Insurance Industry review 2019 report, it was stated that insurance profit for the...

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In KPMG's General Insurance Industry review 2019 report, it was stated that insurance profit for the year ended 30 june 2019 was down 12 percent to $4,399 million a significant reduction on the previous two year's annual results. What are some of the economic issues that may have affected the insurance industry that has affected their result?

Tanmoy · Accepted Answer

KPMG's General Insurance Industry review 2019 report
Introduction
As per the General Insurance Industry Review report 2019, there was a decline in the insurance profit for the year ended 30th June 2019 by 12% to $4399 million. This is a significant decline in 2019 compared to the previous two year 2017 and 2018. As per the KPMG report it was illustrated that the main reasons of the unfavourable claims experience is due to natural hazards and lower release of reserves. But, we will try to focus on specifically the reason minutely to analyse the reason in decline of the general insurance (KPMG). 
Analysis   
In the first half of 2019 there was a huge loss in the insurance industry where there was a loss of $86 million from the risk products compared to the industry in 2018 where it made a profit of $33 million. In the year 2017, the aggregate industry profit made by insurance industry was $1.5 billion in Australia. 
It was due to the ordinary risk products of insurances which made losses amounting to $130 million across the industry in the first half of 2019. As per the KPMG report of 2019 it is the superannuation risk products like the life coverage schemes, TPD insurance and income protection insurance which has reflected a significant decline in the profits (Moneysmart, 2021). 
As on 2019, the profit was reported to be only $44 million in the first half as compared to the $372 million profits in 2018.

In KPMG's General Insurance Industry review 2019 report, it was stated that insurance profit for the year ended 30 june 2019 was down 12 percent to $4,399 million a significant reduction on the...

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