NZ insurance industry's $2b deficit
New Zealand's insurance industry slumped into a deficit of $2.17 billion in the 2011 financial year, after the Christchurch earthquakes saw expenses rocket up by 83 per cent to $2.57b.
Figures from Statistics New Zealand show the insurance and financial services industry was the hardest hit category in the year - down 2.2 per cent or $1.4b.
Total income for all industries rose 4.7 per cent on the 2010 year to $575.39b.
The insurance industry had a surplus of $429m in the 2010 financial year, Statistics said, but was dragged well into deficit in 2011 after it booked a very large net claims expense bill in 2011 as Cantabrians made claims for earthquake damage to property.
The earthquakes also pushed up the industry's current assets and liabilities. Current assets jumped 231 per cent or $10.9b - due to increased reinsurance and other recoveries, while current liabilities shot up 278 per cent or $10.7b following claims increases.
Statistics said the insurance and central government administration (which includes the Earthquake Commission) industries both showed changes in performance and position due to the quakes.
''We expect other industries to show financial movements related to these earthquakes in future.'' The increase in total income followed a 4.2 per cent dip in 2010, and was largely due to a recovery in income from sales of goods and services, which rose 5.5 per cent or $23.2b.
Labour and industry statistics manager Neil Kelly said increases in most industries showed the New Zealand economy was recovering from its 2010 decline.
''In particular manufacturing and agriculture recorded strong growth in 2011, due to increase in both domestic and external demand.''
Total income for the manufacturing industry jumped by 8.6 per cent or $7.6b, while agriculture industry income lifted 14 per cent or $4.1b.
Total expenditure for all business rose 7 per cent to $533.3b. Surplus before income tax dropped 12 per cent to $44.4b.
Salaries and wages paid to all employees across all industries rose 3.9 per cent or $3.46b, topping a 0.4 per cent lift in 2010.
The total value of fixed assets rose 2.6 per cent to $521.4b.
- © Fairfax NZ News
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