Insurance Australia Group (IAG) has officially released the full details of its half-yearly results for FY22-23. Earlier this month, the Trans-Tasman insurance giant released preliminary figures. The insurer said net profit after tax is A$468 million with growth at 7.5%. Gross written premium (GWP) grew by nearly 10%.
“What’s encouraging is the high customer retention rates we continue to hold across our brands, reflecting the trust and value our customers place in our products and services,” said CEO Nick Hawkins (pictured above) in a media release prior to a results briefing.
However, Hawkins mentioned the impacts of high inflation rates and natural catastrophes.
“The deteriorating inflationary environment in the half year had an immediate impact on our businesses,” he said. “Our DIA [Direct Insurance Australia] business was most impacted with a reported insurance margin of 8.9%.”
The recent Auckland floods had a direct impact on the results.
“We expect our FY23 reported insurance margin to be around 10% compared to our previous range of 14% to 16%,” said Hawkins. “This is largely due to the expected higher natural perils costs from the Auckland flood event.”
“Our Intermediated Insurance Australia (IIA) division performed well over the half, recording GWP growth of 7.8% (1H22: 8.9%) and an insurance profit of $49m (1H22: $4m loss),” he said. “The underlying insurance margin also improved to 5.7% (1H22: 5%).
Hawkins said the division was on track to achieve its $250m profit ambition in FY24. He credited the benefits of initiatives including embedding a simplified operating model and upgraded pricing and underwriting capability.
Hawkins said growth in New Zealand was 9.1% in NZ currency and the reported margin increased to 15.2% compared to the first half of 2022.
The insurer reported adding more than 100,000 direct customers across Australia and New Zealand.
“We are making solid inroads against our strategic priorities and medium-term ambitions in the half,” said Hawkins.
