ACT INSURANCE AUTHORITY
Objectives
The objectives of the ACT Insurance Authority (the Authority) are to:  carry out the business of insurer of Territory risks; take out insurance of Territory risks with other entities; satisfy or settle claims in relation to Territory risks; take action, with the Treasurer’s approval, for  realising, enforcing, assigning or extinguishing rights against third parties arising out of or in relation to its business; develop and promote good practices for the management of Territory risks; give advice to the Treasurer about insurance and the management of Territory risks; carry out the role of the Nominal Defendant of the ACT; and administer, on behalf of and under agreement with the Chief Minister’s Department, the Default Insurance Fund.
2010‑11 Priorities
Strategic and operational issues to be pursued in 2010‑11 include:
•	working with selected agencies to reduce the total cost of risk to Government;
•	assisting agencies in the analysis of their operations and assets to improve risk assessment and management;
•	facilitating agency access to the claims reporting and data analysis system to provide an  integrated claims management process;
•	ensuring that accurate information is available for the Authority’s management, its clients and its insurers;
•	conducting regular reviews of existing claims to ensure that appropriate management is being applied, that realistic cost estimates are included in the accounts and that risk management measures are implemented to reduce the chance of similar claims occurring; and
•	conducting progressive reviews of 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.
Estimated Employment Level
2008‑09
Actual Outcome		2009-10
Budget
	2009-10
Est. Outcome	2010-11
Budget
	
15	Staffing (FTE) 	14	14	14	

Changes to Appropriation
Changes to Appropriation						
 	2009-10	2010-11	2011-12	2012-13	2013-14	
Capital Injections	Est. Out.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
						
2009-10 Budget	10,000	10,000	-	 - 	 - 	
						
2010-11 Budget Technical Adjustment						
Saving – Capital Injection – Return to Government	(5,000)	-	-	-	-	
						
2010-11 Budget	5,000	10,000	-	 - 	 - 	

ACT Insurance Authority
Operating Statement
  2009-10			  2009-10	   2010-11		  2011-12	    2012-13	  2013-14		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		Income								
		Revenue								
48,124		User Charges - ACT Government	48,124	50,163	4	54,176	58,510	63,191		
8,542		Interest	13,319	12,129	-9	13,195	14,250	15,300		
2,442		Other Revenue	2,571	2,893	13	2,736	2,763	2,745		
59,108		Total Revenue	64,014	65,185	2	70,107	75,523	81,236		
		Gains								
0		Total Gains	0	0	-	0	0	0		
59,108		Total Income	64,014	65,185	2	70,107	75,523	81,236		
		Expenses								
1,335		Employee Expenses	1,343	1,395	4	1,464	1,479	1,495		
249		Superannuation Expenses	250	248	-1	233	234	236		
1,460		Supplies and Services	1,232	1,454	18	1,485	1,320	1,349		
61,961		Other Expenses	60,971	64,692	6	70,182	75,721	81,210		
65,005		Total Ordinary Expenses	63,796	67,789	6	73,364	78,754	84,290		
-5,897		Operating Result	218	-2,604	#	-3,257	-3,231	-3,054		
-5,897		Total Comprehensive Income	218	-2,604	#	-3,257	-3,231	-3,054		

ACT Insurance Authority
Balance Sheet
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/10			as at 30/6/10	as at 30/6/11	   Var	as at 30/6/12	as at 30/6/13	as at 30/6/14		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
213,412		Cash and Cash Equivalents	211,929	252,054	19	282,363	313,045	344,011		
2,221		Receivables	4,292	4,702	10	4,330	4,009	3,978		
0		Other	86	86	-	86	86	86		
215,633		Total Current Assets	216,307	256,842	19	286,779	317,140	348,075		
		Non Current Assets								
37,912		Receivables	137,789	137,236	..	137,160	136,762	135,857		
50,449		Investments	55,801	53,294	-4	50,787	48,280	45,773		
0		Other	140	140	-	140	140	140		
88,361		Total Non Current Assets	193,730	190,670	-2	188,087	185,182	181,770		
303,994		TOTAL ASSETS	410,037	447,512	9	474,866	502,322	529,845		
		Current Liabilities								
71,781		Payables	32,576	42,406	30	53,630	64,629	70,640		
273		Employee Benefits	260	263	1	263	263	263		
0		Other	87	87	-	87	87	87		
72,054		Total Current Liabilities	32,923	42,756	30	53,980	64,979	70,990		
		Non Current Liabilities								
233,810		Payables	363,663	383,907	6	403,294	422,982	447,548		
0		Employee Benefits	190	192	1	192	192	192		
233,810		Total Non Current Liabilities	363,853	384,099	6	403,486	423,174	447,740		
305,864		TOTAL LIABILITIES	396,776	426,855	8	457,466	488,153	518,730		
-1,870		NET ASSETS	13,261	20,657	56	17,400	14,169	11,115		
		REPRESENTED BY FUNDS EMPLOYED								
-1,870		Accumulated Funds	13,261	20,657	56	17,400	14,169	11,115		
-1,870		TOTAL FUNDS EMPLOYED	13,261	20,657	56	17,400	14,169	11,115		

ACT Insurance Authority 
Cash Flow Statement
  2009-10			  2009-10	   2010-11		  2011-12	    2012-13	  2013-14		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
48,124		User Charges	48,124	50,163	4	54,176	58,510	63,191		
8,542		Interest Received	13,319	12,129	-9	13,195	14,250	15,300		
46,670		Other Revenue	46,627	47,149	1	48,732	49,202	48,860		
103,336		Operating Receipts	108,070	109,441	1	116,103	121,962	127,351		
		Payments								
1,335		Related to Employees	1,338	1,390	4	1,464	1,479	1,495		
249		Related to Superannuation	250	248	-1	233	234	236		
1,452		Related to Supplies and Services	1,224	1,446	18	1,478	1,313	1,342		
69,914		Other	68,237	72,277	6	78,664	84,299	89,357		
72,950		Operating Payments	71,049	75,361	6	81,839	87,325	92,430		
30,386		NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES	37,021	34,080	-8	34,264	34,637	34,921		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
911		Proceeds from Sale/Maturities of Investments	911	911	-	911	911	911		
911		Investing Receipts	911	911	-	911	911	911		
		Payments								
4,749		Purchase of Investments	4,749	4,866	2	4,866	4,866	4,866		
4,749		Investing Payments	4,749	4,866	2	4,866	4,866	4,866		
-3,838		NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES	-3,838	-3,955	-3	-3,955	-3,955	-3,955		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
10,000		Capital Injection from Government	5,000	10,000	100	0	0	0		
10,000		Financing Receipts	5,000	10,000	100	0	0	0		
10,000		NET CASH INFLOW/ (OUTFLOW) FROM FINANCING ACTIVITIES	5,000	10,000	100	0	0	0		
36,548		NET INCREASE/ (DECREASE) IN CASH HELD	38,183	40,125	5	30,309	30,682	30,966		
176,864		CASH AT BEGINNING OF REPORTING PERIOD	173,746	211,929	22	252,054	282,363	313,045		
213,412		CASH AT THE END OF THE REPORTING PERIOD	211,929	252,054	19	282,363	313,045	344,011		

ACT Insurance Authority
Statement of Changes in Equity
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/10			as at 30/6/10	as at 30/6/11	   Var	as at 30/6/12	as at 30/6/13	as at 30/6/14		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
		Opening Equity								
-5,973		Opening Accumulated Funds	8,043	13,261	65	20,657	17,400	14,169		
-5,973		Balance at the Start of the Reporting Period	8,043	13,261	65	20,657	17,400	14,169		
		Comprehensive Income								
-5,897		Operating Result for the Period	218	-2,604	#	-3,257	-3,231	-3,054		
-5,897		Total Comprehensive Income	218	-2,604	#	-3,257	-3,231	-3,054		
0		Total Movement in Reserves	0	0	-	0	0	0		
		Transactions Involving Owners Affecting Accumulated Funds								
10,000		Capital Injections	5,000	10,000	100	0	0	0		
10,000		Total Transactions Involving Owners Affecting Accumulated Funds	5,000	10,000	100	0	0	0		
		Closing Equity								
-1,870		Closing Accumulated Funds	13,261	20,657	56	17,400	14,169	11,115		
-1,870		Balance at the End of the Reporting Period	13,261	20,657	56	17,400	14,169	11,115		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges - ACT Government:  the increase of $2.039 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to an increase in the annual insurance premiums charged to agencies.  The premiums recognise a slight increase in the net expected cost of future claims, predominantly in public liability and property classes.
•	interest:  the increase of $4.777 million in the 2009‑10 estimated outcome from the original budget and the decrease of $1.190 million in the 2010-11 Budget from the 2009‑10 estimated outcome reflects changes in interest rates, as well as the size of investment deposits.
•	other revenue:  the increase of $0.129 million in the 2009‑10 estimated outcome from the original budget and the increase of $0.322 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due primarily to increases in expected reinsurance recoveries.
•	supplies and services:  the decrease of $0.228 million in the 2009‑10 estimated outcome from the original budget and the increase of $0.222 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects decreases in the cost of contractors and consultants due to the next stage of the Risk Management Framework commencing later than anticipated. 
•	other expenses:
–	the decrease of $0.990 million in the 2009‑10 estimated outcome from the original budget mainly reflects lower than anticipated reinsurance costs; and
–	the increase of $3.721 million in the 2010‑11 Budget from the 2009‑10 estimated outcome recognises an increase in the net expected cost of future claims, especially those arising from property and public liability policies.
Balance Sheet
•	cash and cash equivalents:
–	the decrease of $1.483 million in the 2009‑10 estimated outcome from the original budget is due primarily to a decrease in capital injection ($5 million) and lower than anticipated payments at 30 June 2009 ($1.260 million) offset by increased interest receipts ($4.777 million); and
–	the increase of $40.125 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is primarily due to the continued building of investment assets in order to meet future claims.
•	receivables current:  the increase of $2.071 million in the 2009‑10 estimated outcome from the original budget and the increase of $0.410 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects increases in reinsurance recoveries.
•	other current and non current assets:  the increase of $0.226 million in the 
2009‑10 estimated outcome from the original budget is due to prepayment of contract works insurance.
•	receivables non current:  the increase of $99.877 million in the 2009‑10 estimated outcome from the original budget and the decrease of $0.553 million in the 
2010‑11 Budget from the 2009‑10 estimated outcome recognises movement in the provision for reinsurance recoveries associated with changes in both bushfire and ordinary claims liabilities.
•	investments non current:  the increase of $5.352 million in the 2009‑10 estimated outcome from the original budget and the decrease of $2.507 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects the movement of funds between short term and longer term investment structures.
•	payables current: 
–	the decrease of $39.205 million in the 2009‑10 estimated outcome from the original budget reflects the movement of claims from current to non current due to lengthening claim settlement times; and
–	the increase of $9.830 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects higher than anticipated claims liabilities due to growth in large claims.
•	other current liabilities:  the increase of $0.087 million in the 2009‑10 estimated outcome from the original budget is due to premiums received in advance for contract works insurance.
•	payables non current:
–	the increase of $129.853 million in the 2009‑10 estimated outcome from the original budget reflects movement in the provision for claims liability associated with changes in bushfire reserves ($102.732 million) and higher than expected ordinary claims liabilities as a result of growth in expected future claims ($27.121 million); and
–	the increase of $20.244 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects the anticipated growth in the cost of future claims.
•	employee benefits non current:  the increase of $0.190 million in the 2009‑10 estimated outcome from the original budget is due to the movement of long service leave from current to non current liabilities, as well as a change in the methodology to determine leave liabilities.
Cash Flow Statement
•	capital injection from government:  the decrease of $5 million in the 2009‑10 estimated outcome from the original budget and the increase of $5 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to additional funds not being required in 2009‑10 as a result of an improved cash position.
Statement of Changes in Equity
Variances in the statement are explained in the notes above.