Insurance: Income Statement - J10

Released
27 February 2018 03:00 p.m.
Next release
28 June 2018 03:00 p.m.
Source
Reserve Bank of New Zealand
Periodicity
Quarterly
Previous years: Quarterly:
Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017
Revenue ($m) (12 month running total)
Gross earned premium 8,670 8,923 9,060 9,187 9,307
Life 2,162 2,193 2,218 2,245 2,267
Non-life 6,508 6,729 6,843 6,942 7,039
Outwards reinsurance premium 2,228 2,285 2,323 2,066 2,079
Net earned premium 6,442 6,638 6,738 7,121 7,228
Life 1,739 1,765 1,780 1,803 1,825
Non-life 4,703 4,873 4,957 5,318 5,403
Other insurance revenue & commission 339 342 341 336 344
Total insurance revenue 6,781 6,980 7,079 7,457 7,572
Total investment revenue 1,456 881 726 633 518
Other revenue & commission 73 62 69 65 60
Total revenue 8,309 7,922 7,874 8,154 8,151
Expenses ($m) (12 month running total)
Gross claims / benefits 5,397 7,533 7,850 8,105 8,193
Gross policy expense life 1,258 1,277 1,274 1,273 1,330
Gross claims expense non-life 4,139 6,257 6,576 6,832 6,863
Outwards reinsurance & other recoveries 1,439 3,535 3,690 3,388 3,412
Net claims / benefits 3,958 3,999 4,160 4,717 4,781
Net policy expense life 997 1,010 1,011 1,015 1,052
Net claims expense non-life 2,961 2,988 3,149 3,702 3,729
Movement in technical items 363 -28 -121 -80 -132
Other insurance expenses & commission 2,665 2,698 2,707 2,708 2,754
Total insurance expenses 6,986 6,669 6,746 7,344 7,403
Total investment expenses 26 23 23 19 18
Other expenses 41 66 68 54 54
Total expenses 7,053 6,758 6,837 7,418 7,475
Profit ($m) (12 month running total)
Before tax 1,256 1,164 1,036 736 676
After tax 898 822 748 581 532
Key ratios
Gross loss ratio non-life (%) 63.6 93.0 96.1 98.4 97.5
Net loss ratio non-life (%) 63.0 61.3 63.5 69.6 69.0
Net combined ratio non-life (%) 100.7 98.6 100.4 103.9 103.6

The Data: Coverage, Periodicity, and Timeliness

Coverage characteristics

The Insurance Financial Performance statistics contains the revenue and expense of New Zealand’s insurance industry. Data is collected from the Quarterly Insurance Survey (QIS) which collects data from insurance companies with:

  • Gross annual premium $50+ million at financial year end
or
  • Total assets $500+ million at financial year end

but excluding reinsurers with no NZ primary insurance

The standard QIS covers 28 out of 88 insurers and reinsurers accounting for just under 90% of assets and premiums of the regulated insurance industry as a whole.

The QIS excludes reinsurers with no New Zealand primary insurance. It also does not cover the Earthquake Commission and the Accident Compensation Corporation, as these organisations have their own enabling legislation and are not supervised by the Reserve Bank.

More information regarding the regulated insurance industry can be found in the Insurers section.

Periodicity

Quarterly

Timeliness

Data is released approximately three months after the reference quarter.

For the initial publication released on 27 February 2018 the quarters covered are June 2016 to September 2017.

Access by the public

Statistics release calendar

The Statistics Release Calendar provides a long-term plan of scheduled releases. It is updated and released on the first working day of the month.

Integrity

Dissemination of terms and conditions under which official statistics are produced, including confidentiality of individual responses

The Reserve Bank of New Zealand (RBNZ) is the prudential regulator and supervisor of all insurers undertaking insurance business in New Zealand (NZ), and is responsible for administering the Insurance (Prudential Supervision) Act 2010 (IPSA).

In 2015 the Reserve Bank introduced regular data collections from New Zealand licensed insurers to support the Reserve Bank’s own prudential supervision under IPSA and monitoring of the financial sector as mandated by the Reserve Bank of New Zealand Act 1989.

The Reserve Bank of New Zealand publishes only aggregated data. All information collected in the insurer data returns is subject to section 135 confidentiality provisions under IPSA.

Data series are compiled using a 12-month running total.

Provision of information about revisions and advance notice of major changes in methodology

New data, or revised data, is in bold font. This applies to the summary table only and not excel files. Revisions are generally published when a table is next due to be updated and released. Should revisions need to be made more promptly, a ‘special note’ is published.

Any major changes in methodology are posted on the website as a ‘special note’.

Quality

Dissemination of documentation on methodology and sources used in preparing statistics

An Excel template is completed and returned each quarter by QIS respondents. The template is accompanied by a file that specifies procedures and definitions for survey respondents.

Please see New Zealand Insurer Data Collections for more information.

Insurance Methods

Life

Aggregate for all insurers that reported using life insurance methods.

Non-life

Aggregate for all insurers that reported using general insurance methods.

Life insurance methods

Insurance valuation methods that are consistent with Appendix C of NZ IFRS 4, or equivalents under other accounting standards. These are either projection (long-term future cash-flows including any renewals), accumulation (past cash-flows), or a mixture. Information that is reported specifically for life insurance methods (and not general insurance methods).

General insurance methods

Insurance valuation methods that are consistent with Appendix D of NZ IFRS 4, or equivalents under other accounting standards. These are a mixture of past and future cash-flows but without including any future renewals. Information that is reported specifically for general insurance methods (and not life insurance methods).

Revenue

Gross earned premium

The earned policy or premium revenue from insurance business, gross of outwards reinsurance premium. Includes policy or administration fees. Excludes non-insurance (such as commissions for distributing another insurer’s products).

Outwards reinsurance premium

The premium for outwards reinsurance that corresponds to gross earned premium. Excludes commissions.

Net earned premium

The gross earned premium revenue from insurance business, net of outwards reinsurance premium.

Other insurance revenue and commission

Comprises other insurance revenue and outwards reinsurance commission.

Other insurance revenue

Other revenue arising from insurance business (such as management fee income on insurance investment contracts) that is not included elsewhere.

Outwards reinsurance commission

Commission earned on outwards reinsurance, whether this is fixed rate or amount, or a variable rate or amount that is dependent on experience on the outwards reinsurance policy(s).

Total insurance revenue

The sum of net earned premium and other insurance revenue and commission.

Interest, dividends and rent

Revenue earned from investment assets, gross of investment management expense, but excluding realised and unrealised gains and losses.

Realised gains and losses

Revenue earned from the realised increase in value of investment assets, gross of investment management expense.

Unrealised gains and losses

Revenue earned from the unrealised increase in value of investment assets, gross of investment management expense. Include movements in property revaluation reserves.

Total Investment Revenue

The sum of interest, dividends and rent, together with realised and unrealised gains and losses.

Other revenue and commission

Comprises fee and commission revenue and other revenue.

Fee and commission revenue

Fee and commission revenue that is from insurance-related activity (such as distribution or administration of another insurer's products), as well as activities not related to insurance. Excludes fee and commission revenue from insurance business.

Other revenue (excl. insurance-related)

Other revenue not included elsewhere, such as increase in currency translation reserves and gains or losses on sale of a business (if loss record as a negative figure). Excludes revenue from insurance business.

Total Revenue

The sum of total insurance revenue, total investment revenue and other revenue and commission.

Expenses

Gross claims/ benefits expense

Comprises gross policy expense and gross claims expense.

Gross policy expense

Under life insurance methods, the cost of policy related expenses, gross of outwards reinsurance and other recoveries.

Gross claims expense

Under general insurance methods, the cost of claims, gross of outwards reinsurance and other recoveries.

Outwards reinsurance and other recoveries

Under life insurance methods, the portion of gross policy expense that is met from outwards reinsuranceor payments by third parties.

Under general insurance methods, the portion of gross claims expense that is met from outwards reinsuranceor payments by third parties.

Net claims / benefits expense

Comprises net policy expense and net claims expense.

Net policy expense

Under life insurance methods, the cost of policy related expenses, net of outwards reinsurance and other recoveries.

Net claims expense

Under general insurance methods, the cost of claims, net of outwards reinsurance and other recoveries.

Movement in technical items

Comprises the following by life and non-life:

  • Increase in policy liability, net of RI (life)
  • Increase in deferred & future tax on policy liabilities (life)
  • Increase in policyholder unvested benefit liability (life)
  • Increase in unexpired risk liability (non-life)
  • Decrease in deferred acquisition cost (non-life)

Increase in policy liability, net of reinsurance (RI)

Under life insurance methods, the increase since the start of the financial year in policy liabilities, net of outwards reinsurance and other recovery assets. May be gross or net of tax, consistent with the insurer’s financial statements or alternative financial information. Include deposits component of premiums and withdrawals component of benefits.

Increase in deferred and future tax on policy liabilities

Under life insurance methods, the increase since the start of the financial year in deferred and future tax on policy liabilities. If tax is not recorded here then increase in policy liability, net of RI and increase in policyholder unvested benefit liability figures should be net of tax.

Increase in policyholder unvested benefit liability

Under life insurance methods, the increase since the start of the financial year in policyholder unvested benefit liability. May be gross or net of tax, consistent with the insurer’s financial statements or alternative financial information.

Increase in unexpired risk liability

Under general insurance methods, the increase since the start of the financial year in unexpired risk liability.

Decrease in deferred acquisition cost

Under general insurance methods, the decrease since the start of the financial year in deferred acquisition cost assets (excludes outwards reinsurance commission).

Other insurance expenses and commission

Comprises initial commission, other commission, other acquisition and other insurance expenses.

Initial commission

For life insurance and health insurance, the cost of commissions in respect of the first year of cover.

Other commission expenses

The cost of commissions, excluding initial commission. This includes all commission in respect of general insurance.

Other acquisition expenses

Expenses associated with sales of insurance business, but excluding commissions. For example marketing costs and salaries of employed sales staff.

Other insurance expenses

Administration and management expenses associated with insurance business that is not included elsewhere.

Total insurance expenses

The sum of net claims/ benefits, movement in technical items and other insurance expenses and commission.

Total investment expenses

Expenses associated with management of investment assets (regardless of whether investments are managed internally or externally).

Other expenses

Expenses that are not included elsewhere, but excluding expenses associated with insurance business.

Total expenses

The sum of total insurance expenses, investment expenses and other expenses.

Profit

Profit before tax

Total revenue less total expenses

Profit after tax

Total revenue less total expenses, net of tax expense.

Key Ratios

Gross loss ratio (non-life)

Gross claims expense (non-life) divided by gross earned premium (non-life).

Net loss ratio (non-life)

Net claims expense (non-life) divided by net earned premium (non-life).

Net combined ratio (non-life)

Total insurance expenses (non-life) divided by net earned premium (non-life).

Insurance financial statistics

New publication

Today the Reserve Bank has published its first release of Insurance financial statistics.

This release includes financial performance (Insurance: Income Statement - J10) and financial position (Insurance: Balance Sheet - J20) aggregates for the insurance industry as collected through the Quarterly Insurer Survey (QIS).

The QIS currently covers 28 of 88 licensed insurers which accounts for just under 90% of assets and premiums of the insurance industry as a whole. Insurance provided by government entities such as Accident Compensation Corporation (ACC) and Earthquake Commission (EQC) are not included in these statistics.

Please see the background notes and series descriptions for the respective tables for more information about this publication.

If you have any questions, please contact us at stats-info@rbnz.govt.nz.

27 February 2018

Symbols and conventions for summary table

0 Zero or value rounded to zero
- Not applicable
.. Not available
bold Revised/new
italics Provisional
light red background Historical

General notes

  • Individual figures may not sum to the totals due to rounding
  • Percentage changes are calculated on unrounded numbers
  • You are free to copy, distribute and adapt these statistics subject to the conditions listed on our copyright page.