How IAG performed in the 2022 financial year

Insurance Australia Group (IAG) held its annual general meeting (AGM) last week, where acting AGM chairman David Armstrong and managing director and CEO Nick Hawkins delved into the group’s challenges, achievements, and plans going forward.

In his speech, Armstrong highlighted the concerning number of extreme weather events in Australia – from hailstorms, thunderstorms, and floods to East Coast lows and even a tornado and earthquake – impacting customers and their communities.

“I take this opportunity to recognise the outstanding work of our people who bring our purpose to life in these circumstances, whether they are first on the ground after an event, or those who manage claims and guide our customers to help them get back on their feet,” he said.

Despite facing a myriad of challenges, IAG performed well in the 2022 financial year:

• The gross written premium (GWP) rose by nearly 6% to over $13 billion;
• Net profit after tax hit $347 million compared to a $427 million loss in the previous financial year; and
• The group has maintained a strong balance sheet.

“We achieved this outcome despite having to strengthen prior period reserves and respond to the high number of natural peril events, volatile investment markets, and a higher inflationary environment,” Armstrong said.

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Meanwhile, Hawkins shared the strategies he and IAG’s senior leadership team came up with to make the group more resilient:

• Grow customers;
• Build better business;
• Create value through digital; and
• Manage risks.

Hawkins also revealed the senior leadership team’s priorities for the next four years:

• Add one million new customers by FY26;
• Move to 80% digital transactions by FY26;
• Significantly turn around the group’s Intermediated Insurance Australia business to achieve $250 million insurance profit by FY24;
• Create $400 million of value through claims and supply chain initiatives.

“Having a more focused operating model, a leadership team with deep expertise, and a clear strategy for growth gives us confidence in the future,” Hawkins said.

“We are forecasting mid-to-high single-digit growth in gross written premium, and our reported insurance margin guidance is for a range of 14% to 16%. This is a step towards our aspirational goals to deliver a 15% to 17% insurance margin and a 12% to 13% Return on Equity over the medium term.”