IAG New Zealand, which serves more than two million customers, posted a positive insurance result during the year ended June 30, 2023 (FY23) – “a year of extreme weather,” as the general insurer put it – despite total claims volumes from weather-related events being three times higher than the sum in FY22.
Just the Auckland Anniversary floods and Cyclone Gabrielle, combined, alone generated around 50,000 claims, approximately 57% of which had been closed as of August 21. The insurer expects the majority of these claims to be closed before the end of 2023.
Chief executive Amanda Whiting (pictured) called it “a challenging year for many” while offering assurances that IAG NZ would continue to be there for impacted communities.
“One of the things I’ve been most proud of this year is our ability to support our customers in their time of need,” Whiting said when IAG New Zealand reported an insurance profit of AU$44 million for FY23 and a higher gross written premium.
Insurance profit, according to IAG, is its underwriting result plus the investment income on assets backing the company’s technical reserves. In FY22, IAG NZ’s insurance profit was AU$220 million. Claims inflation and higher reinsurance costs, among other things, impacted the firm’s insurance margin.
Read more: IAG releases “solid” FY23 results
For the New Zealand chief, however, the way the business responded during the large loss events was among its key achievements for FY23.
“[The North Island floods and Cyclone Gabrielle] were the second and third largest loss events to ever hit New Zealand – and all in the space of just three weeks,” Whiting said.
“Our claims hubs were the first to be established on the ground in affected communities, and with the complexity of the remaining open claims, we will continue our presence on the ground for as long as we are needed.”
Meanwhile it was highlighted that IAG NZ continues to collaborate with government and communities on its climate response.
Whiting said: “Our focus is on the important issue of managed retreat in New Zealand, along with risk-based pricing and leadership on risk mitigation, including the introduction of our three-step plan for flood risk reduction.
“This will play an extremely important role in helping ensure New Zealanders can continue to access and afford the protection of insurance.”
During the year ended June 30, the business deployed the first stage of its new core technology system, the goal of which is to reduce complexity and enable improved customer experience by replacing multiple systems with a single enterprise ecosystem.
IAG NZ also continued to see a shift to digital interactions in FY23, with 37% of claims lodged digitally. Additionally, where possible, the insurer has been simplifying its operating environment and automating its processes.
Other improvements include the expansion of the company’s vehicle repair network, Repairhub, with two new sites launched in FY23. It was also during this period that the Fleet Fit programme was introduced.
Whiting, whose camp also has sustainability initiatives in place, said: “Our work in these areas will enable us to continue to run a strong, sustainable business, and this means we can continue to be here for New Zealanders when they need us, well into the future.”
What do you think about this story? Share your thoughts in the comments below.
