AUSTRALIAN CAPITAL TERRITORY INSURANCE AUTHORITY
Objectives
The objectives of the Authority are to: enable the Territory to meet the cost of its insurable claims and losses in an orderly, timely and cost effective manner; ensure the costs are fully reflected in the Territory’s accounts; protect the Territory from the risk of very large claims; and aid and improve risk management practices in all agencies.
The ACT Insurance Authority is established as a statutory authority under the ACT Insurance Corporation Act 2000.  The Authority operates a centrally managed fund to cover the insurable risks of Territory agencies.
2005-06 Highlights
Strategic and operational issues to be pursued in 2005‑06 include:
•	providing training and assistance to agencies in the analysis of their operations and assets to improve risk assessment and management; 
•	continuing an on-going review of existing claims to ensure that appropriate management is being applied to claims, that realistic estimates of costs are included in the accounts and that risk management measures are implemented, and where necessary, to reduce the chance of similar claims occurring; 
•	reviewing arrangements between agencies and external bodies to ensure that the appropriate level of risk is transferred to contractors, as well as providing advice on new contracts; and
•	implementing a premium setting process which incorporates actuarial advice on claims experience.

ACT Insurance Authority	
Operating Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
30  723		User Charges - ACT Government	30  728	31  243	2	40  249	41  280	42  337		
6  781		Interest	6  241	7  096	14	7  538	7  366	7  559		
1  206		Other Revenue	600	2  112	252	2  266	2  456	2  517		
38  710		Total Revenue	37  569	40  451	8	50  053	51  102	52  413		
		Gains								
0		Total Gains	0	0	-	0	0	0		
38  710		Total Income	37  569	40  451	8	50  053	51  102	52  413		
		Expenses								
631		Employee Expenses	692	976	41	954	957	973		
104		Superannuation Expenses	114	143	25	131	130	132		
928		Supplies and Services	1  078	1  037	-4	971	994	1  019		
33  049		Other Expenses	48  524	40  901	-16	42  349	43  340	44  474		
34  712		Total Ordinary Expenses	50  408	43  057	-15	44  405	45  421	46  598		
3  998		Operating Result	-12  839	-2  606	80	5  648	5  681	5  815		

ACT Insurance Authority	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
540		Receivables	1  650	1  650	-	1  055	1  055	1  055		
118  372		Investments	43  023	55  425	29	66  772	91  498	101  368		
9		Other	0	0	-	0	0	0		
118  921		Total Current Assets	44  673	57  075	28	67  827	92  553	102  423		
		Non Current Assets								
10  556		Receivables	10  110	8  503	-16	8  431	8  431	8  431		
0		Investments	63  454	81  858	29	85  326	63  456	63  455		
10  556		Total Non Current Assets	73  564	90  361	23	93  757	71  887	71  886		
129  477		TOTAL ASSETS	118  237	147  436	25	161  584	164  440	174  309		
		Current Liabilities								
31  414		Payables	32  870	37  625	14	40  770	39  673	40  686		
108		Employee Benefits	130	146	12	162	162	162		
31  522		Total Current Liabilities	33  000	37  771	14	40  932	39  835	40  848		
		Non Current Liabilities								
88  397		Payables	105  482	109  511	4	114  845	113  117	116  158		
131		Employee Benefits	128	133	4	138	138	138		
88  528		Total Non Current Liabilities	105  610	109  644	4	114  983	113  255	116  296		
120  050		TOTAL LIABILITIES	138  610	147  415	6	155  915	153  090	157  144		
9  427		NET ASSETS	-20  373	21	-100	5  669	11  350	17  165		
		REPRESENTED BY FUNDS EMPLOYED								
9  427		Accumulated Funds	-20  373	21	-100	5  669	11  350	17  165		
9  427		TOTAL FUNDS EMPLOYED	-20  373	21	-100	5  669	11  350	17  165		

ACT Insurance Authority	
Cash Flow Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
31  600		User Charges	30  980	31  906	3	40  914	41  945	43  002		
6  781		Interest Received	6  241	7  096	14	7  538	7  366	7  559		
61  715		Other Revenue	59  679	43  768	-27	44  016	44  336	45  894		
100  096		Operating Receipts	96  900	82  770	-15	92  468	93  647	96  455		
		Payments								
714		Related to Employees	785	1  098	40	1  064	1  066	1  084		
927		Related to Supplies and Services	1  077	1  035	-4	969	992	1  017		
92  672		Other	108  322	72  831	-33	75  619	75  519	78  025		
94  313		Operating Payments	110  184	74  964	-32	77  652	77  577	80  126		
5  783		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	-13  284	7  806	-159	14  816	16  070	16  329		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
699		Proceeds from Sale/Maturities of Investments	0	911	#	911	8  656	911		
699		Investing Receipts	0	911	#	911	8  656	911		
		Payments								
16  482		Purchase of Investments	7  000	19  315	176	4  380	0	7  370		
16  482		Investing Payments	7  000	19  315	176	4  380	0	7  370		
-15  783		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-7  000	-18  404	-163	-3  469	8  656	-6  459		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
10  000		Capital Injection from Government	10  000	23  000	130	0	0	0		
10  000		Financing Receipts	10  000	23  000	130	0	0	0		
10  000		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	10  000	23  000	130	0	0	0		
0		NET INCREASE/(DECREASE) IN CASH HELD	-10  284	12  402	221	11  347	24  726	9  870		
0		CASH AT BEGINNING OF REPORTING PERIOD	53  307	43  023	-19	55  425	66  772	91  498		
0		CASH AT THE END OF THE REPORTING PERIOD	43  023	55  425	29	66  772	91  498	101  368		

ACT Insurance Authority	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
-4  571		Opening Balance	-17  534	-20  373	-16	21	5  669	11  350		
		Accumulated Funds								
3  998		Operating Result for the Period	-12  839	-2  606	80	5  648	5  681	5  815		
		Reserves								
3  998		Total Income And Expense For The Period	-12  839	-2  606	80	5  648	5  681	5  815		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
10  000		Capital Injections	10  000	23  000	130	0	0	0		
9  427		Closing Balance	-20  373	21	100	5  669	11  350	17  165		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges – ACT Government:  the increase of $0.515m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to indexation of the annual insurance premiums charged to agencies.
•	interest:
•	the decrease of $0.540m in the 2004‑05 estimated outcome from the original budget is due to long term investment returns being less than anticipated; and
•	the increase of $0.855m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the investment return on capital injections.
•	other revenue:
•	the decrease of $0.606m in the 2004‑05 estimated outcome from the original budget reflects an unanticipated decrease in the reinsurance recovery for the January 2003 bushfire.  This is partially offset by other insurance recoveries and an unrealised gain on investments; and
•	the increase of $1.512m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects anticipated increases to the construction industry premium and changes in premium accounting as a consequence of the adoption of Australian equivalents to International Financial Reporting Standards (AIFRS).  Insurance policies where the Authority does not hold a significant risk are no longer classified as annual premiums but as other revenue.
•	employee and superannuation expenses:  the increase of $0.313m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to the full year effect of the creation of four new positions; and
•	supplies and services:  the increase of $0.150m in the 2004‑05 estimated outcome from the original budget reflects the employment of contract staff pending the creation of permanent positions.
•	other expenses:
•	the increase of $15.475m in the 2004‑05 estimated outcome from the original budget recognises an increase in the net expected cost of future claims arising from medical malpractice and public liability policies.  Significant growth in award settlements and claim numbers has led to a restatement of the claims provision; and
•	the decrease of $7.623m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the one-off adjustment for increases in medical malpractice and public liability claims made to the claims provision in 2004‑05.
Balance Sheet
•	receivables current:  the increase of $1.110m in the 2004‑05 estimated outcome from the original budget recognises higher than anticipated reinsurance recoveries and an increase in interest receivable.
•	current investments:
•	the decrease of $75.349m in the 2004‑05 estimated outcome from the original budget is largely due to recognising fixed interest fund investments with the Central Financing Unit as long term non‑current investments ($63.454m) and a flow on effect from the 2003‑04 audited outcome that identified a lower level of investment than originally budgeted; and
•	the increase of $12.402m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the building of investments in order to meet future claims.
•	receivables non-current:  the decrease of $0.446m in the 2004‑05 estimated outcome from the original budget and the decrease of $1.607m in the 2005‑06 Budget from the 2004‑05 estimated outcome recognises movements in the provision for reinsurance recoveries.
•	investments non-current:
•	the increase of $63.454m in the 2004‑05 estimated outcome from the original budget reflects the recognition of fixed interest fund investments as long term investments; and
•	the increase of $18.404m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the receipt of a capital injection to build investments to meet future claims.
•	payables current:
•	the increase of $1.456m in the 2004‑05 estimated outcome from the original budget and the increase of $4.755m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects anticipated growth in the cost of future claims.
•	payables:
•	the increase of $17.085m in the 2004‑05 estimated outcome from the original budget reflects the increase in cost and in the number of medical malpractice and public liability claims; and
•	the increase of $4.029m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the anticipated growth in the cost of future claims.