IAG continues to retain a “strong capital position” despite the impact of the COVID-19 pandemic on the sector, according to an IAG trading update for the first quarter of the 2021 financial year, ending September 30.

The update revealed that the company continues to “retain a strong capital position, well above its targeted benchmarks.”

“In the opening quarter, we have recorded low single-digit gross written premium growth despite incurring an adverse foreign currency translation effect from New Zealand,” said retiring IAG managing director and chief executive officer Peter Harmer.

He added that IAG’s insurance profit for the quarter reflects the seasonally low incidence of natural peril events in the country, while underlying profitability has been similar to that in the second half of the previous financial year.

“Within our underlying insurance margin, COVID-19-related effects have been broadly neutral in aggregate during this period, with some benefit from lower motor claims frequency offset by incremental expense and provisioning impacts,” Harmer continued.

“Despite the uncertainty confronting us, including that from COVID-19, we face the future with the confidence that we have a resilient business which is in strong financial shape, and which is well equipped to rise to the challenges presented by this current environment.”