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 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; and administer, under agreement with the Chief Minister’s Department, the Default Insurance Fund.
2009-10 Priorities
Strategic and operational issues to be pursued in 2009-10 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
Budget			2008-09
Est. Outcome	2009-10
Budget	
14		  Staffing  (FTE)	15	14	

Changes to Appropriation
Changes to Appropriation						
 	2008-09	2009-10	2010-11	2011-12	2012-13	
Capital Injections	Est. Out.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
						
2008-09 Budget	10,000	10,000	10,000	 - 	 - 	
						
2009-10 Budget	10,000	10,000	10,000	 - 	 - 	
 	 	 	 	 	 	
ACT Insurance Authority
Operating Statement
2008-09			2008-09	2009-10		2010-11	2011-12	2012-13		
Budget			Est.Outcome	Budget	Var	Estimate	Estimate	Estimate		
$'000			$'000	$'000	%	$'000	$'000	$'000		
		Income								
		Revenue								
49,937		User Charges - ACT Government	49,937	48,124	-4	50,290	52,553	54,918		
10,961		Interest	10,961	8,542	-22	9,673	10,445	11,107		
3,826		Other Revenue	1,037	2,442	135	2,514	2,575	2,645		
64,724		Total Revenue	61,935	59,108	5	62,477	65,573	68,670		
		Gains								
0		Total Gains	0	0	-	0	0	0		
64,724		Total Income	61,935	59,108	5	62,477	65,573	68,670		
		Expenses								
1,286		Employee Expenses	1,286	1,335	4	1,430	1,440	1,459		
220		Superannuation Expenses	197	249	26	228	228	230		
1,488		Supplies and Services	1,288	1,460	13	1,490	1,519	1,556		
62,447		Other Expenses	71,571	61,961	-13	65,773	69,762	73,940		
65,441		Total Ordinary Expenses	74,342	65,005	-13	68,921	72,949	77,185		
-717		Operating Result	-12,407	-5,897	52	-6,444	-7,376	-8,515		

ACT Insurance Authority
Balance Sheet
 Budget			Est.Outcome	 Planned		Planned	Planned	Planned		
as at 30/6/09			as at 30/6/09	as at 30/6/10	Var	as at 30/6/11	as at 30/6/12	as at 30/6/13		
$'000			$'000	$'000	 %	 $'000	 $'000	 $'000		
		Current Assets								
145,388		Cash and Cash Equivalents	176,864	213,412	21	246,976	268,003	286,357		
11,163		Receivables	2,792	2,221	-20	2,252	1,719	1,688		
156,551		Total Current Assets	179,656	215,633	20	249,228	269,722	288,045		
		Non Current Assets								
11,050		Receivables	39,519	37,912	-4	37,028	36,954	36,556		
28,437		Investments	53,073	50,449	-5	47,942	45,435	42,928		
39,487		Total Non Current Assets	92,592	88,361	-5	84,970	82,389	79,484		
196,038		TOTAL ASSETS	272,248	303,994	12	334,198	352,111	367,529		
		Current Liabilities								
56,770		Payables	64,870	71,781	11	78,442	84,764	90,790		
319		Employee Benefits	273	273	-	273	273	273		
57,089		Total Current Liabilities	65,143	72,054	11	78,715	85,037	91,063		
		Non Current Liabilities								
156,015		Payables	213,078	233,810	10	253,797	272,764	290,671		
156,015		Total Non Current Liabilities	213,078	233,810	10	253,797	272,764	290,671		
213,104		TOTAL LIABILITIES	278,221	305,864	10	332,512	357,801	381,734		
-17,066		NET ASSETS	-5,973	-1,870	69	1,686	-5,690	-14,205		
		REPRESENTED BY FUNDS EMPLOYED								
-17,066		Accumulated Funds	-5,973	-1,870	69	1,686	-5,690	-14,205		
-17,066		TOTAL FUNDS EMPLOYED	-5,973	-1,870	69	1,686	-5,690	-14,205		

ACT Insurance Authority
Cash Flow Statement
2008-09			2008-09	2009-10		2010-11	 2011-12	2012-13		
 Budget			Est.Outcome	Budget	Var	Estimate	 Estimate	Estimate		
 $'000			 $'000	$'000	%	 $'000	$'000	$'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
49,998		User Charges	49,998	48,124	-4	50,290	52,553	54,918		
10,961		Interest Received	10,961	8,542	-22	9,673	10,445	11,107		
47,053		Other Revenue	46,557	46,670	..	47,149	48,730	48,794		
108,012		Operating Receipts	107,516	103,336	-4	107,112	111,728	114,819		
		Payments								
1,278		Related to Employees	1,278	1,335	4	1,430	1,440	1,459		
220		Related to Superannuation	197	249	26	228	228	230		
1,479		Related to Supplies and Services	1,279	1,452	14	1,482	1,512	1,549		
103,622		Other	63,364	69,914	10	76,453	83,566	89,272		
106,599		Operating Payments	66,118	72,950	10	79,593	86,746	92,510		
1,413		NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES	41,398	30,386	-27	27,519	24,982	22,309		
		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								
4,666		Purchase of Investments	4,666	4,749	2	4,866	4,866	4,866		
4,666		Investing Payments	4,666	4,749	2	4,866	4,866	4,866		
-3,755		NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES	-3,755	-3,838	-2	-3,955	-3,955	-3,955		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
10,000		Capital Injection from Government	10,000	10,000	-	10,000	0	0		
10,000		Financing Receipts	10,000	10,000	-	10,000	0	0		
10,000		NET CASH INFLOW (OUTFLOW) FROM FINANCING ACTIVITIES	10,000	10,000	-	10,000	0	0		
7,658		NET INCREASE/ (DECREASE) IN CASH HELD	47,643	36,548	-23	33,564	21,027	18,354		
137,730		CASH AT BEGINNING OF REPORTING PERIOD	129,221	176,864	37	213,412	246,976	268,003		
145,388		CASH AT THE END OF THE REPORTING PERIOD	176,864	213,412	21	246,976	268,003	286,357		

ACT Insurance Authority
Statement of Changes in Equity
 Budget			Est.Outcome	 Planned		Planned	Planned	Planned		
as at 30/6/09			as at 30/6/09	as at 30/6/10	Var	as at 30/6/11	as at 30/6/12	as at 30/6/13		
$'000			$'000	$'000	 %	 $'000	 $'000	 $'000		
-26,349		Opening Balance	-3,566	-5,973	-67	-1,870	1,686	-5,690		
		Accumulated Funds								
-717		Operating Result for the Period	-12,407	-5,897	52	-6,444	-7,376	-8,515		
		Reserves								
-717		Total Income And Expense For The Period	-12,407	-5,897	52	-6,444	-7,376	-8,515		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
10,000		Capital Injections	10,000	10,000	-	10,000	0	0		
-17,066		Closing Balance	-5,973	-1,870	69	1,686	-5,690	-14,205		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges — ACT Government:  the decrease of $1.813 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to a decrease in the annual insurance premiums charged to agencies.  The premiums recognise a slight decrease in the net expected cost of future public liability and property claims.
•	interest:  the decrease of $2.419 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects lower interest rates.
•	other revenue:
•	the decrease of $2.789 million in the 2008-09 estimated outcome from the original budget is due primarily to a decrease in expected reinsurance recoveries; and
•	the increase of $1.405 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects increased expected payments by reinsurers and recoveries.
•	supplies and services:
•	the decrease of $0.2 million in the 2008-09 estimated outcome from the original budget reflects decreases in the cost of contractors and consultants due to the work of the Risk Management Framework commencing later in the year than anticipated; and
•	the increase of $0.172 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects increased use of consultants and contractors on the work of the Risk Management Framework which was scheduled for 2008-09.
•	other expenses:
•	the increase of $9.124 million in the 2008-09 estimated outcome from the original budget reflects a reduced discount rate on claims.  The outstanding claims liability includes a discount to allow for interest that is expected to be earned on claims between now and the date of payment.  A lower discount rate reduces the amount of expected interest and therefore increases the claim liability; and
•	the decrease of $9.610 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects an anticipated improvement in long term discount rates, combined with lower anticipated cash settlement of claims due in part to better claims performance.
Balance Sheet
•	cash and cash equivalents:  the increase of $31.476 million in the 2008-09 estimated outcome from the original budget and the increase of $36.548 million in the 2009-10 Budget from the 2008-09 estimated outcome are primarily due to the continued building of investment assets in order to meet future claims.
•	receivables current:  the decrease of $8.371 million in the 2008-09 estimated outcome from the original budget and the decrease of $0.571 million in the 2009-10 Budget from the 2008-09 estimated outcome predominately recognises decreases in reinsurance recoveries.
•	receivables non current:  the increase of $28.469 million in the 2008-09 estimated outcome from the original budget and the decrease of $1.607 million in the 2009-10 Budget from the 2008-09 estimated outcome recognises movement in the provisions for both ordinary and bushfire reinsurance recoveries associated with increased claims liabilities.
•	investments non current: 
•	the increase of $24.636 million in the 2008-09 estimated outcome from the original budget reflects the flow on effect of the 2007-08 audited outcome which includes payment of some large cash settlements; and
•	the decrease of $2.624 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects the movement of funds from short term investments.
•	payables current:  the increase of $8.1 million in the 2008-09 estimated outcome from the original budget and the increase of $6.911 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects higher than anticipated claims liabilities due to the reduction in discount rates.
•	payables non current:
•	the increase of $57.063 million in the 2008-09 estimated outcome from the original budget reflects higher than expected growth in claims liabilities as a result of a lower discount rate and growth in expected future claims; and
•	the increase of $20.732 million in the 2009-10 Budget from the 2008-09 estimated outcome reflects the anticipated growth in the cost of future claims.
Cash Flow Statement
•	other expenses:  the decrease of $40.258 million in the 2008-09 estimated outcome from the original budget reflects lower than anticipated cash settlement of claims due in part to better claims performance.
Statement of Changes in Equity
Variances in the statement are explained in the notes above.