Insurance Australia Group (IAG) will be publishing its detailed financial results for the year ended June 30 (FY20) on August 07, but in the meantime the company has announced what it expects to report next month.
Subject to finalisation of audit and board approval, the largest general insurance company in Australia and New Zealand is likely to post an underlying insurance margin of 16%, a reported insurance margin of 10.1%, and a 1.1% growth in gross written premium.
In a release, IAG cited an expected pre-tax loss from fee-based business of $23 million, a pre-tax loss on shareholders’ funds income of $181 million, as well as an increased pre-tax customer refund provision of $246 million for multi-year pricing issues. Also anticipated is a total profit after tax of $326 million on the sale of the insurer’s stake in India-based SBI General Insurance Company.
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Commenting on how they fared in the period, IAG managing director and chief executive Peter Harmer stated: “We have experienced an immensely challenging second half to the 2020 financial year, characterised by severe natural peril activity, the disruption caused by the COVID-19 pandemic to our people, customers, and suppliers, and the marked volatility in investment markets which has adversely impacted our results.
“I am proud of the way our people have risen to the challenges we have seen, maintaining a high level of commitment to our customers through a sequence of major natural peril events in the middle of the financial year. And then, with the emergence of COVID-19, through the swift implementation of customer support measures for those suffering hardship as we rapidly shifted to home working arrangements.”
Meanwhile it was announced that the group’s cash earnings are estimated to amount to $279 million. No final dividend, however, is expected to be paid in respect of FY20.
“While IAG recognises many shareholders will be disappointed with no final dividend,” the company explained, “it believes it is important to adhere to its long-established dividend payout policy and to maintain a strong capital position in the current uncertain environment.”
As for the firm’s immediate future, Harmer noted: “We enter FY21 with a strong balance sheet and enhanced reinsurance protection, and are well-equipped to negotiate the challenges and opportunities that a post-COVID environment will present.”