SGIC records $117M consolidated operating profit

19/9/96

The State Government Insurance Commission has reported a consolidated operating profit of $117 million in 1995-96 before receiving a State Government contribution of $74.8 million for the Third Party Insurance Fund.

Finance Minister Max Evans announced the result from the commission's annual report which was tabled in State Parliament today.

It came from an overall investment return of 11.8 per cent and enabled the SGIC to reduce its consolidated deficit from $227 million to $36 million.

"These positive results clearly demonstrate that the SGIC has successfully met the challenge of improving its overall performance in the management of public insurance business," Mr Evans said.

A feature of the year's trading was an operating profit of $110 million in the Third Party Insurance Fund.

When combined with the Government's contribution of $74.8 million, the profit reduced the fund's deficit from $191.7 million to $6.9 million at June 30.

By August 1, the remaining deficit had been cleared and the fund was $700,000 in surplus.

On that day, third party insurance premiums were reduced by $50, leaving Western Australians with the second lowest premium in Australia for a standard family sedan.

The WA premium of $192 was now $37 less than the equivalent payment in South Australia, $43 less than in Queensland and the Northern Territory, $77 less than in the ACT, $80 less than in Victoria, and $241 less than in New South Wales.

"Remembering that the fund had suffered four consecutive years of losses, accumulating to $330 million by the end of 1992-93, to be now in surplus and offering Western Australians such a low premium rate is an outstanding achievement," Mr Evans said.

In addition to its success with the Third Party Insurance Fund, the SGIC reduced the Government Insurance Fund deficit from $18.3 million to $11.6 million, and it produced a profit of $1.6 million in the Compensation (Industrial Diseases) Fund.

During the year the commission secured a five-year appointment to implement and manage RiskCover, the new managed fund for self-insurance of State Government agencies.

RiskCover was one of the most significant public sector reforms to be introduced across Government.

The commission also consolidated its property holdings by buying the Government Employees' Superannuation Board's 30 per cent share in Westralia Square, giving the SGIC 100 per cent ownership of the building.

The commission also continued its sponsorship of community projects. Its $1.1 million contribution to Statewide road safety and crash prevention initiatives included sponsorship of the Police Service's new RoadShow, a specially equipped vehicle for teaching road safety in schools and the community.

A further contribution of $160,000 took the commission's total contribution to research into asbestos-related diseases to $970,000.

"Good management has ensured that the SGIC has made a strong contribution to the Western Australian community," Mr Evans said.

Media contacts: Ministerial - Hugh Ryan 322 6529

SGIC - Luana Raspa 264 3374