Reporting Form GRF 430.0

Claims Expense by State and Territory of Australia

Instruction Guide

Introduction

This form captures data required by the Australian Bureau of Statistics. Claims expense inside Australia is to be reported by, class of business for each state or territory of Australia, based on where the risk is located.

Audit requirements

The information provided under the form is not required to be audited and has been exempted from the definition of ‘yearly statutory accounts’.

Reporting entity

This form is to be completed by:

1. Branch operations of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations); and
2. Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity).

This form is not to be completed by authorised reinsurers.

Unit of measurement

This form is to be presented in Australian currency, rounded to thousands of dollars, with no decimal place.

Basis of preparation

Insurers are requested to follow the recognition and measurement basis required by the APRA forms for the reporting of claims expense in this form. Specifically, claims expense is to be recognised as per the instructions to GRF 310.2 Claims Expense and Reinsurance Recoveries.

Where the insurers operations are wholly within Australia, total claims expense per this form should agree to the aggregate of claims expense disclosed in GRF 310.2 Claims Expense and Reinsurance Recoveries.

Do not follow the recognition and measurement requirements for claims expense contained in AASB 1023 ‘General Insurance Contracts’.

Reporting period

Insurers are required to report the information in the reporting form on an annual basis.

• The annual information is to be completed in respect of the financial year of the insurer.
• The financial information requested in this form is to be reported as at the last day of the reporting period on a financial year to date basis of the insurer.

Reporting lag

This form must be lodged for each of the reporting units, within the number of business days after the end of the quarter as set out in Reporting Standard GRS 430.0 Claims Expense by State and Territory of Australia.

Specific instructions

Classes of Insurance Business

1. Direct Business

The classes of business for companies that are not specialist reinsurers are as follows:

(I). Houseowners/Householders (H & H)

This class covers the common H & H policies inclusive of:

• Contents;
• Personal property;
• Arson; and
• Burglary.

Public liability normally attaching to these products are to be separated and included in Public and Product Liability class of business – item (XIII).

(II). Commercial Motor Vehicle

Motor vehicle insurance (including third party property damage) other than insurance covering vehicles defined below under Domestic Motor Vehicle. It includes long and medium haul trucks, cranes and special vehicles and policies covering fleets.

(III). Domestic Motor Vehicle

Motor vehicle insurance (including third party property damage) covering private use motor vehicles including utilities and lorries, motor cycles, private caravans, box and boat trailers and other vehicles not normally covered by business or commercial policies.

(IV). Travel

Insurance against losses associated with travel including loss of baggage and personal effects, losses on flight cancellations and overseas medical costs.

(V). Fire and Industrial Special Risks (ISR)

Fire

Includes all policies normally classified as 'Fire' and includes:

• sprinkler leakage;
• subsidence;
• windstorm;
• hailstone;
• crop;
• arson; and
• loss of profits and any extraneous risk normally covered under fire policies, e.g. flood.

ISR

Standard policy wordings exist for this type of policy. All policies which contain such standard wordings or where the wording is substantially similar are to be classified as ISR.

(VI). Marine

Includes Marine Hull (including pleasure craft), Marine Cargo (including sea and inland transit insurance).

(VII). Aviation

Aviation (including aircraft hull and aircraft liability).

(VIII). Mortgage

Insurance against losses arising from the failure of debtors to meet financial obligations to creditors or under which payment of debts is guaranteed. It includes lease guarantee.

(IX). Consumer Credit (CCI)

Insurance to protect a consumer's ability to meet the loan repayments on personal loans and credit card finance in the event of death or loss of income due to injury, illness or unemployment.

(X). Other Accident

Includes the following types of insurance:

• Miscellaneous accident (involving cash in transit, theft, loss of money);
• All risks (baggage, sporting equipment, guns);
• Engineering when not part of ISR or Fire policy;
• Plate glass when not part of packaged policy (e.g. houseowners /householders)
• Guarantee (Insurance Bonds);
• Live Stock;
• Pluvius; and,
• Sickness and Accident (which provides stated benefits where the insured is killed or suffers loss of specific parts of the body or is prevented from carrying out the insured’s normal occupation. In addition, regular benefits may be paid over a short period of time (typically less than 3 years), noting that continuous disability policies are now considered to be Life Insurance Policies and should not be provided by general insurance companies).

(XI). Other

All other insurance business not specifically mentioned elsewhere. It includes, for example:

• All guarantees (e.g. fidelity Guarantee)
• Trade Credit;
• Extended Warranty (includes insurance by a third party for a period in excess of the manufacturer's or seller’s normal warranty);
• Kidnap and Ransom; and
• Contingency.

(XII). Compulsory Third Party Motor Vehicle (CTP)

This class consists only of CTP business.

(XIII). Public and Product Liability

• Public Liability covers legal liability to the public in respect of bodily injury or property damage arising out of the operation of the insured's business. Product Liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods and also environmental clean-up caused by pollution spills where not covered by Fire and ISR policies.
• Also will include builders warranty insurance.
• Includes public liability attaching to houseowners/householders policies.

(XIV). Professional Indemnity (PI)

Includes Directors' and Officers' liability insurance plus legal expense insurance. Cover for legal expenses is generally included in this type of policy.

(XV). Employers' Liability (EL)

Includes:

• Workers' compensation;
• Seamen's compensation; and
• Domestic workers compensation.

2. Inwards reinsurance

Include the aggregate value of all inwards reinsurance business in this line item

Claims Expense – Each State and Territory

Report claims expense Inside Australia according to where the risk is located.

Claims expense for the purpose of this form is to be interpreted as the same meaning for claims expense as calculated and reported in GRF 310.2 Claims Expense and Reinsurance Recoveries.

This will reflect the claim payments made in the current year plus any movement in the value of the Outstanding Claims Provision (OCP) and any movement in the value of the Premiums Liabilities (PL) reported in GRF 300.0 Statement of Financial Position. The OCP and PL reported in GRF 300.0 Statement of Financial Position do not have to be equal to, but must not be less than the amounts required by GPS 310 Audit and Actuarial Reporting and Valuation and hence the amounts reported in the forms GRF 210.0 Outstanding Claims Provision - Insurance Risk Charge and GRF 210.1 Premium Liabilities - Insurance Risk Charge.

Where the insurer does not have insurance business outside of Australia (i.e. claims liabilities), the following should apply:

• the total claims expense amounts for all direct classes of business on this form should agree to the aggregate amount of claims expense recorded from Direct Business in GRF 310.2 Claims Expense and Reinsurance Recoveries; and
• the total claims expense amounts for Inwards reinsurance on this form should agree to the aggregate amount of claims expense recorded from Reinsurance in GRF 310.2 Claims Expense and Reinsurance Recoveries.