Price increases look set to continue throughout the 2018 financial year, an insurance boss has said, with the property and commercial motor markets the ones to watch.
Speaking after the release of their FY17 results,
Peter Harmer, managing director and CEO of
IAG, said that the firm expects to see increases continue over the coming year.
“I don’t want to signal anything too strongly but yes the momentum we closed FY17 with will continue into FY18,” Harmer said. “As we closed out the year, we were seeing single digit increases in property classes and commercial motor but we were also seeing slight reductions in Western Australia workers’ comp as gazetted rates were lowered over there.
“Since December 2015, when we began to aggressively try to re-write our book to return our book to a more adequate technical pricing footing, we have been gaining momentum.”
Across its entire book, Harmer noted that IAG saw like-for-like increases of around 4%. However, experiences differ in each product line.
He added that the business was “very appreciative” of the support it had received from brokers over the last 12 months as the firm pushed through rate rises.
“We have been very pleased with how we have been able to retain business through our broker channel at a time when we have been pushing prices up to get them back to a more sustainable technical level,” he commented.
Although profits increased by 48.6% over the course of the year, shares in IAG dropped more than 7% as the firm signalled narrowing profit margins for the year ahead. The company said it expects to post low single digit GWP growth over the coming year, as the metric will take a $60 million hit when the firm exits the motorcycle dealership channel with its
Swann Insurance brand.
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