IAG has revealed that price increases will begin to flow through its commercial book in line with inflation.
With the announcement of its half year financial results, IAG noted that a stronger performance from its commercial business was a key factor in a better-than-expected result.
Peter Harmer, managing director and CEO of IAG, said that the firm will look to increase prices in various parts of the book, including in the commercial space.
“The price increases that are going through in our motor book, I think they will keep pace with inflation in that low to mid-single digits. In commercial, we are looking at increases that are very similar,” Harmer told a press conference following the results announcement.
“Over the last three or four years we have experienced some very difficult commercial pricing conditions and we are returning pricing to levels that, long-term, will drive the right financial results for that business.”
While the commercial insurance market has been in a historic slump over the last several years, insurers and brokers across Australia are seeing the beginnings of premium increases.
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Harmer noted that IAG continues to “experience positive signs in commercial” and improving market conditions have also helped the firm boost retention rates in the Australian Business Division.
As news of
Suncorp’s efforts to take over Tower broke yesterday morning, Harmer said that if their fellow, Australia-based insurer is successful, the move would be “very stabilising and a vote of confidence in the New Zealand market.”
On its own acquisition plans, Harmer said he does not foresee any major moves in the near future.
“We consider ourselves to be ex-M&A here in Australia and in New Zealand. Certainly, if there were bolt-on acquisitions that didn’t impinge on the competitive position, we would look at those,” Harmer continued.
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