The householders insurance line made an underwriting loss of $1.077 billion in the December quarter, according to Australian Prudential Regulation Authority data released today.

The December result breaks two straight quarters of profit and is a deterioration from a year-earlier gain of $218 million.

Incurred claims blew out from $2.09 billion to $5.11 billion in the quarter – a period that included severe hailstorms in October and November.

The underwriting loss was reflected in the net combined operating ratio, which deteriorated to 135.4% from 91.9%.

In other key householders metrics, amounts recoverable from reinsurers surged to $1.79 billion from $354 million; gross written premium increased to $4.49 billion from $4.22 billion; and insurance revenue grew to $4.31 billion from $3.92 billion.

At the industry level, general insurers made a combined profit after tax of $132 million from continuing operations, down sharply from $1.81 billion a year earlier.

The December outcome reflected weaker underwriting earnings, which slumped to $272 million from $2.29 billion, and a decline in the investment result to $428 million from $1 billion.

Incurred claims increased to $14.56 billion from $10.44 billion; insurance revenue grew to $20.5 billion from $19.5 billion; and the net combined operating ratio weakened to 98.3% from 84.9%.

Short-tail property classes of business, which include householders and domestic motor, slumped to an underwriting loss of $707 million from a year-earlier $1.01 billion profit.

GWP was $12.88 billion, up from $12.37 billion, and incurred claims rose to $11.02 billion from $6.89 billion.

Domestic motor underwriting earnings dropped to $186 million from $333 million. In other short-tail property lines, commercial motor declined to $26 million from $69 million, and fire and industrial special risk dropped to $156 million from $399 million.

Long-tail lines, comprising professional indemnity and five other classes, made an underwriting profit of $333 million, up from $305 million a year earlier.

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