IAG has announced that insurance profits for the first half of 2017 have dipped to $571 million from $610 million in the first half of 2016.
Net profit after tax also fell from $466 million to $446 million but GWP rose from $5.5 billion to $5.8 billion thanks to improved commercial pricing and rate increases to counter higher claims costs.
The Australian Business Division produced better-than-expected GWP with like-for-like growth of over 4%, after the allowance for the divestment of Swann Insurance motor dealership business.
Retention levels in the commercial space also exceeded expectations with the firm noting that there were further signs that commercial pricing has passed the bottom of the cycle.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
“This is a sound result for our core businesses in Australia and New Zealand, reinforced by the strength and integrity of our brands, our sharpened customer focus, and the quality and passion of our people,” Peter Harmer
, IAG managing director and CEO, said.
Net natural peril claims costs exceeded allowances by $80 million and hit $420 million for the half, with the Kaikoura earthquake contributing $117 million.
Looking ahead, the firm maintained its full year reported margin guidance of 12.5-14.5%, as IAG expects to face continued claim cost pressures.
IAG to set up Firemark Labs in Singapore
IAG calls for more autonomous tech