Australian general insurers returned to profitability last year, after suffering underwriting losses in 2009.The latest JP Morgan Deloitte general insurance industry survey, released yesterday, shows a weighted average combined ratio for all personal and commercial lines of business of 97 per cent. In 2009, the industry's average combined ratio was 101 per cent (the combined ratio calculates claims plus underwriting expenses as a percentage of premium income, and a combined ratio of over 100 per cent indicates an underwriting loss).The turnaround was due to a drop in the average combined ratio for home and contents cover from 108 per cent in 2009 (a consequence of the Victorian bushfires) to 88 per cent last year.Other areas showing improvement were compulsory third-party cover in New South Wales, where the average combined ratio fell from 125 to 110 per cent; commercial property, where the average combined ratio fell from 99 to 89 per cent, and directors' and officers' insurance, where the combined ratio fell from 109 to 90 per cent.The industry achieved significantly higher premium rate increases in personal lines. Home and contents' premiums went up an average of 11 per cent last year, compared with six per cent in 2009. NSW CTP cover went up 10 per cent, compared with four per cent the previous year, and Queensland CTP cover went up 13 per cent, compared with seven per cent the year before.There was more competitive pressure on the commercial side of the business. Premium rates fell by an average of one per cent, compared with a three per cent increase in 2009. JP Morgan insurance analyst Siddarth Parameswaran said there was excess capital in the global insurance market which found its way into the local market through large commercial brokers. It was harder for foreign insurers to crack the personal market because they don't have the distribution to compete with the big local players.Insurers said they expected to be able to increase premiums on personal lines by an average of five per cent this year, and commercial lines by one per cent. Deloitte actuarial partner Elaine Collins said these estimates might have to be revised in the wake of Queensland and Victorian floods (the survey was conducted late last year), with insurers pushing for higher premium increases to cover claims' expenses.Asked to indicate their concerns, underwriters said they were worried about increased competition, climate change and weather events, and changes to the Australian Prudential Regulation Authority's capital standards.