Insurance Australia Group (IAG) has released financial results for IH25. The insurance giant reported a net profit after tax (NPAT) of $778m, up 91% and gross written premium (GWP) of $8.43 billion.

In an ASX announcement, the trans-Tasman firm attributed the profit increase to a post-tax release of the COVID Business Interruption provision, an increase in net earned premiums and an improvement in insurance profits.

“Our results reflect the volatility of our sector and the fact we’re often subject to factors outside our control – the good years help us weather the bad and be well positioned to pay future customer claims,” said CEO Nick Hawkins (main picture).

$5.2 billion in claims payouts

The announcement said IAG paid out $5.2 billion in claims and policy renewals levels were at 90%. Hawkins said the high renewals reflect confidence in IAG’s brands and its “quality of service.”

“In Australia, our strategic alliance with RACQ, once complete, will further increase the reach of our retail insurance products through some of the most trusted brands in financial services,” he said.

Retail Enterprise Platform

Hawkins said IAG has migrated more than three million insurance policies to its Retail Enterprise Platform and is adding 300,000 policies each month, “delivering significant improvements in customer experience and enabling us to efficiently price and manage risk.”

LA fires and north Queensland floods

The CEO also said the company is working to minimise the impact of premium increases on customers, “particularly those facing financial hardship due to the cost-of-living crisis.”

He also said the LA wildfires and floods in north Queensland were a “stark reminder” of the need for climate resilience.

However, Hawkins said he was “confident in IAG’s ability to support our customers, deliver strong returns for shareholders and help build resilience and strength across Australia and New Zealand.”