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 for 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 the Territory’s business; develop and promote good practices for the management of Territory risks; and give advice to the Treasurer about insurance and the management of Territory risks. 
The Authority also administers, under agreement with the Chief Minister’s Department, the Default Insurance Fund.
2007–08 Priorities
Strategic and operational issues to be pursued in 2007‑08 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;
•	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; and
•	developing and implementing systems and procedures to administer the Default Insurance Fund.
Estimated Employment Level
	2006-07
Est.  Outcome	2007-08
Budget	
Staffing (FTE)	12	11	

ACT Insurance Authority	
Operating Statement	
  2006-07			  2006-07	   2007-08		  2008-09	  2009-10	  2010-11		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
42,038		User Charges - ACT Government	42,143	44,706	6	45,844	46,990	48,165		
8,371		Interest	8,728	9,471	9	9,760	9,800	9,656		
2,305		Other Revenue	4,401	2,609	-41	2,676	2,749	2,820		
52,714		Total Revenue	55,272	56,786	3	58,280	59,539	60,641		
		Gains								
0		Total Gains	0	0	-	0	0	0		
52,714		Total Income	55,272	56,786	3	58,280	59,539	60,641		
		Expenses								
982		Employee Expenses	985	1,021	4	1,114	1,159	1,188		
233		Superannuation Expenses	205	240	17	261	275	282		
1,155		Supplies and Services	1,457	1,290	-11	1,188	1,214	1,244		
46,515		Other Expenses	62,358	57,857	-7	61,259	63,499	65,802		
48,885		Total Ordinary Expenses	65,005	60,408	-7	63,822	66,147	68,516		
3,829		Operating Result	-9,733	-3,622	63	-5,542	-6,608	-7,875		

ACT Insurance Authority	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/07			as at 30/6/07	as at 30/6/08	   Var	as at 30/6/09	as at 30/6/10	as at 30/6/11		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
81,952		Cash and Cash Equivalents	84,128	111,421	32	120,034	124,218	128,925		
4,516		Receivables	5,955	5,955	-	5,955	5,955	5,955		
86,468		Total Current Assets	90,083	117,376	30	125,989	130,173	134,880		
		Non Current Assets								
15,741		Receivables	13,839	13,839	-	13,839	13,839	13,839		
68,507		Investments	61,143	36,632	-40	33,925	31,301	28,794		
84,248		Total Non Current Assets	74,982	50,471	-33	47,764	45,140	42,633		
170,716		TOTAL ASSETS	165,065	167,847	2	173,753	175,313	177,513		
		Current Liabilities								
31,773		Payables	48,897	60,111	23	61,124	62,137	63,150		
141		Employee Benefits	326	336	3	344	344	344		
31,914		Total Current Liabilities	49,223	60,447	23	61,468	62,481	63,494		
		Non Current Liabilities								
0		Payables	137,417	132,597	-4	143,024	150,179	159,241		
149,765		Interest Bearing Liabilities	0	0	-	0	0	0		
160		Employee Benefits	0	0	-	0	0	0		
149,925		Total Non Current Liabilities	137,417	132,597	-4	143,024	150,179	159,241		
181,839		TOTAL LIABILITIES	186,640	193,044	3	204,492	212,660	222,735		
-11,123		NET ASSETS	-21,575	-25,197	-17	-30,739	-37,347	-45,222		
		REPRESENTED BY FUNDS EMPLOYED								
-11,123		Accumulated Funds	-21,575	-25,197	-17	-30,739	-37,347	-45,222		
-11,123		TOTAL FUNDS EMPLOYED	-21,575	-25,197	-17	-30,739	-37,347	-45,222		

ACT Insurance Authority	
Cash Flow Statement	
  2006-07			  2006-07	   2007-08		  2008-09	  2009-10	  2010-11		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
42,702		User Charges	42,807	44,706	4	45,844	46,990	48,165		
8,371		Interest Received	8,728	9,471	9	9,760	9,800	9,656		
44,014		Other Revenue	43,937	45,372	3	45,482	45,712	45,783		
95,087		Operating Receipts	95,472	99,549	4	101,086	102,502	103,604		
		Payments								
1,194		Related to Employees	1,157	1,251	8	1,367	1,434	1,470		
1,153		Related to Supplies and Services	1,455	1,177	-19	1,179	1,206	1,236		
79,741		Other	83,683	81,123	-3	86,172	91,840	92,236		
82,088		Operating Payments	86,295	83,551	-3	88,718	94,480	94,942		
12,999		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	9,177	15,998	74	12,368	8,022	8,662		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
911		Proceeds from Sale/Maturities of Investments	911	13,934	#	911	911	911		
911		Investing Receipts	911	13,934	#	911	911	911		
		Payments								
1,762		Purchase of Investments	5,707	2,639	-54	4,666	4,749	4,866		
1,762		Investing Payments	5,707	2,639	-54	4,666	4,749	4,866		
-851		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-4,796	11,295	336	-3,755	-3,838	-3,955		
12,148		NET INCREASE/(DECREASE) IN CASH HELD	4,381	27,293	523	8,613	4,184	4,707		
69,804		CASH AT BEGINNING OF REPORTING PERIOD	79,747	84,128	5	111,421	120,034	124,218		
81,952		CASH AT THE END OF THE REPORTING PERIOD	84,128	111,421	32	120,034	124,218	128,925		

ACT Insurance Authority	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/07			as at 30/6/07	as at 30/6/08	   Var	as at 30/6/09	as at 30/6/10	as at 30/6/11		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
-14,952		Opening Balance	-11,842	-21,575	-82	-25,197	-30,739	-37,347		
		Accumulated Funds								
3,829		Operating Result for the Period	-9,733	-3,622	63	-5,542	-6,608	-7,875		
		Reserves								
3,829		Total Income And Expense For The Period	-9,733	-3,622	63	-5,542	-6,608	-7,875		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
-11,123		Closing Balance	-21,575	-25,197	-17	-30,739	-37,347	-45,222		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges – ACT Government:  
–	the increase of $0.105 million in the 2006‑07 estimated outcome from the original budget reflects additional insurance cover required by agencies; and 
–	the increase of $2.563 million in the 2007‑08 Budget from the 2006‑07 estimated outcome is due to an increase in the annual insurance premiums charged to agencies.  The increase in premiums reflects a $1.3 billion rise in total Territory asset values and it recognises an increase in the net expected cost of future claims arising due to significant growth in award settlements and claim numbers.
•	interest:  
–	the increase of $0.357 million in the 2006‑07 estimated outcome from the original budget reflects a slight increase in interest rates; and 
–	the increase of $0.743 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects an increase in interest arising from the accumulation of investments in order to meet future claims.
•	other revenue: 
–	the increase of $2.096 million in the 2006‑07 estimated outcome from the original budget reflects an increase in insurance recoveries, a refund from Comcare and a recovery for services provided to the Default Insurance Fund, this is slightly offset by a decrease in construction industry premiums; and 
–	the decrease of $1.792 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects a decrease in expected reinsurance recoveries.
•	supplies and services:  
–	the increase of $0.302 million in the 2006‑07 estimated outcome from the original budget reflects increases in the cost of contractors, insurance brokers and other consultants; and
–	 the decrease of $0.167 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects anticipated decreases in the use of contractors.
•	other expenses:  
–	the increase of $15.843 million in the 2006‑07 estimated outcome from the original budget reflects the deterioration of claims experience in the six months to 31 December 2007 which has been driven by the increasing cost of settlements and the hailstorms experienced during summer; and
–	the decrease of $4.501 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects the anticipated settlement of the hailstorm claims in 2006-07.  There is no estimate for a similar event in 2007-08.
Balance Sheet
•	cash and current investments:
–	the increase of $2.176 million in the 2006‑07 estimated outcome from the original budget reflects the building of investments in order to meet future claims; and
–	the increase of $27.293 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects the movement of investments from non‑current to current and the building of investments in order to meet future claims.
•	receivables current:  the increase of $1.439 million in the 2006-07 estimated outcome from the original budget recognises increases in reinsurance recoveries.
•	receivables non‑current:  the decrease of $1.902 million in the 2006‑07 estimated outcome from the original budget recognises movement in the provision for reinsurance recoveries.
•	investments non-current:
–	the decrease of $7.364 million in the 2006‑07 estimated outcome from the original budget reflects the movement of funds to short term investment and the payment of claims; and
–	the decrease of $24.511 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects movement of investments from non‑current to current.
•	payables current:
–	the increase of $17.124 million in the 2006‑07 estimated outcome from the original budget reflects the movement of claims from non‑current to current and claims for  hailstorm damage; and
–	the increase of $11.214 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects anticipated growth in the cost of future claims.
•	employee benefits current:  increase of $0.185 million in the 2006‑07 estimated outcome from the original budget reflects the movement of long service leave from non‑current to current.
•	interest bearing liabilities/payables non-current:  
–	the decrease of $12.348 million in the 2006‑07 estimated outcome from the original budget reflects the movement of claims from non-current to current; and
–	the decrease of $4.820 million in the  2007‑08 Budget from the 2006‑07 estimated outcome reflects the movement of claims from non-current to current.
•	employee benefits non-current: the decrease of $0.160 million in the 2007‑08 Budget from the 2006‑07 estimated outcome reflects movement of long service leave from non-current to current.