Insurance Australia Group (IAG) presented its financial and operational updates at its 2024 Annual General Meeting (AGM), held Oct. 24.
The company detailed efforts in supporting customers, enhancing sustainability measures, and maintaining a stable financial outlook.
CEO Nick Hawkins (pictured left) and chair Tom Pockett (pictured right) delivered the key addresses, outlining IAG’s activities across Australia and New Zealand during a challenging year for the insurance industry.
Pockett highlighted that IAG paid out around $10.7 billion in claims over the last year, with a claim acceptance rate of 98% across its Australian and New Zealand operations.
Over the past three years, increased global catastrophe events, rising reinsurance costs, labour shortages, and inflationary pressures have led to higher premiums, impacting both customers and the company.
Pockett said the company was committed to assisting customers in recovering from natural disasters and unexpected losses.
“We are very conscious of the impact of higher premiums on our most vulnerable customers in this
environment, and our businesses provided a number of customer support measures,” he said.
Recognising these difficulties, IAG implemented several customer assistance programs, particularly aimed at supporting its more vulnerable customers. These initiatives include specialised care teams to assist with financial hardship and offer premium reductions to customers who take measures to reduce their natural hazard risks.
On the financial front, IAG reported a net profit after tax of $898 million for FY24, an 8% increase from FY23. Contributing to this growth was an 11% rise in net earned premiums, which reached $9.2 billion, alongside improved insurance margins and stronger investment returns.
Unlike the previous year, there was no release of business interruption claims provisions in FY24.
Reflecting its strong capital position, IAG declared a final dividend of 17 cents per share, raising the total dividend for the year to 27 cents, marking an 80% increase compared to FY23. The dividend payout ratio stood at approximately 72% of net profit after tax, in line with IAG's dividend policy.
The company also returned $550 million to shareholders through buybacks over the last two years. In August 2024, it announced plans for an additional $350 million buyback, signalling a robust financial footing.
Hawkins focused on IAG’s continued emphasis on improving customer claims processes, particularly in the context of increasingly frequent extreme weather events.
“By moving to a single technology platform, we have accelerated claims settlements by up to two weeks. We are applying digital and artificial intelligence solutions to assist in finalising claims,” he said.
He also addressed the company’s response to the 2022 floods, which led to a Federal Government inquiry.
“In regard to sustainability, we have a company-wide approach, and this year we continued to focus on building climate and disaster resilience and supporting the transition,” Hawkins said.
IAG's focus on community resilience was another key theme, with the company running educational initiatives such as the NRMA Insurance Help Nation program, launched in collaboration with the Australian Red Cross. This program is designed to better prepare communities for extreme weather.
In addition, IAG offers pricing incentives to customers in bushfire-prone areas who meet criteria under its Bushfire Resilience Rating.
On the sustainability front, IAG reported progress in its climate and disaster resilience initiatives.
The company has refreshed its climate scenario analysis and entered renewable energy procurement agreements across its sites. It has also met its goal of assisting one million people in Australia and New Zealand to take action against natural disaster risks ahead of its FY25 deadline.
Diversity remains a key priority, with women representing 44% of senior management positions by FY24. IAG has set a target for women to occupy 50% of these roles by the end of the financial year. In terms of Indigenous employment, 1.14% of the company’s Australian workforce identifies as Indigenous, with plans in place to reach the 3% target by FY25.
IAG also continues to focus on addressing modern slavery risks within its supply chain, publishing its fourth Modern Slavery Statement in December 2023. The company has updated its procurement standards to include modern slavery considerations and has provided resources to suppliers to help manage these risks.
Looking ahead, Hawkins outlined IAG’s strategy for growth, emphasising the company’s continued focus on both its retail and intermediated businesses.
A key component of this strategy is the company’s investment in a unified technology platform, which has streamlined policy, pricing, and claims operations across its retail business. This platform is expected to support future growth by improving efficiency and customer experience.
In terms of financial outlook, IAG is targeting an insurance margin of 13.5% to 15.5% and mid-to-high single-digit growth in gross written premiums for FY25. The company is factoring in an expected increase in natural peril costs, which are anticipated to rise by approximately 18%.
IAG remains optimistic about its ability to meet these targets and continue delivering returns to shareholders, having increased dividends by 80% in FY24 and announcing additional buybacks.
The company also highlighted its role as a “financial shock absorber” in the region, helping customers recover from natural disasters while maintaining financial stability.
