Insurers perform well but look to avoid future troubles

Insurers perform well but look to avoid future troubles | Insurance Business

Insurers perform well but look to avoid future troubles

IAG has called for a national approach to disaster mitigation and has formed a roundtable working group with five other large corporates to investigate the costs of mitigation work ways of educating the community about insurance risks, particularly those linked to extreme weather.

In comments released as part of its half-yearly financial report IAG says as an insurance leader it believes “a sustainable response to fires, storms and floods is of national economic significance to Australia”.

It has formed The Australian Business Roundtable for Disaster Resilience and Safer Communities with Investa Property Group, Munich Re, Optus, Australian Red Cross, and Westpac Group, stating these groups were involved with community planning or disaster recovery and had an interest in reducing the social and economic cost of natural disasters.

While IAG is seeking to avoid losses from future disasters it has avoided the worst of recent events and posted a half-yearly insurance profit of $815 million for the six months to December 2012 equating to an insurance margin of 19.9% off the back of a 13.5% increase in Gross Written Premium (GWP) to $4,59m.

IAG’s direct insurance business – Australia Direct – reported an 8.8% increase in revenue drawn from most product classes while the underlying insurance margin was 13.1%

Its’ intermediated insurance business CGU grew revenue by 7.7% and reported an insurance margin of 23.1%, both stemming from a period of lower natural perils and thus lower claims for the group.

CGU also increased its Gross Written Premium (GWP) by 7.7% to $1,433 million, with growth sourced primarily from rate increases to recover higher input costs.

Suncorp Insurance has also released its half-yearly financials with its general insurance division recording a net profit after tax of $564m, up from $162m this time a year ago with the insurer attributing much of this growth to operational efficiencies, positive investment markets and fewer natural hazard events.

GWP increased 9.6% to $4,225m with personal insurance lines such as Home insurance growing 14.5% and Motor insurance growing 5.2%. Commercial Insurance GWP increased 10.1% to $774m with growth across all major product lines.

At the same time Suncorp has stated that claims stemming from Ex-Tropical Cyclone Oswald will cost between $200 million to $220 million while other natural hazards costs during January were $50 million, and this means that at 31 January, the Group’s natural hazard claims for the year to date were between $397 million and $417 million, against a full-year allowance of $520 million.