Insurance Australia Group (IAG) has reported a “solid year” for FY23. The Trans-Tasman insurance giant has released its full year financial results.
A media release said gross written premium (GWP) growth “is above 10% for the year” and operating costs were “maintained” in line with a target of $2.5 billion. Net profit after tax (NPAT), according to the release, was up nearly 40% to $803 million.
However, the release said “elevated inflation” in home and motor claims costs and a higher natural perils allowance impacted the underlying insurance margin which narrowed to 12.6% (FY22:14.6%).
“We made sound progress against our strategic priorities adding approximately 132,000 customers in our DIA [Direct Insurance Australia] business,” said Nick Hawkins (pictured above), IAG’s CEO. “While IIA [Intermediated Insurance Australia] finished the year strong with an insurance profit of $209 million (FY22: $103 million loss), on track to meet its FY24 insurance profit target of at least $250 million.”
The release said the profit increase benefited from a post-tax business interruption provision release of $392 million.
“It came in a year where we paid around $10.2 billion in claims to support our customers, up approximately 20% on FY22,” said Hawkins.
IAG said “momentum” in its intermediated business was underscored by a 7.7% underlying margin, up from 5% last year.
In New Zealand, the underlying insurance margin of 13.5% (FY22: 16.8.%) “largely reflected higher underlying claims and reinsurance costs,” said the release.
“We’ve continued the roll out of the Enterprise Platform and introduced more digital capabilities than ever before, with over 100 new mobile, automation and online features added across DIA, IIA and the New Zealand businesses,” said Hawkins.
The CEO referred to “positive momentum” as the firm enters FY24.
“We’re also heartened by the ongoing high levels of customer renewals and growth in new customers,” he said.
