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IAG Group has announced a 30.1% insurance profit increase in its half year results.
Among the highlights, the firm confirmed 9.5% local currency GWP growth for New Zealand, which was attributed to ongoing growth in personal insurances, led by motor.
IAG has seen insurance profits rise from AU$571 million at the half in 2017 to AU$743 million at the half in 2018 as GWP was also boosted by 0.6%. On a like for like basis, GWP grew by close to 4%, the firm said, thanks to rate increases in commercial and consumer lines as well as volume growth in motor.
Peter Harmer, IAG managing director and CEO, said that the results are “encouraging” for the firm as the business has seen a favourable impact related to several initiatives already put in place.
“This included programs of work around combating claims inflation through our car hire initiatives and customer choice campaign, accelerating our partnering with global experts to simplify processes and reduce complexity, and the bedding down of the Australia division created in July last year,” Harmer said.
The Australia division saw underlying GWP growth of close to 3% thanks in large part to 4.9% growth in personal motor rates, countering claims inflation.
The insurer also saw average rate increases of close to 5% in commercial classes with a reported margin of 18.8% thanks to higher than expected reserve releases and below average natural disaster outcomes.
It also announced that it is set to undertake a strategic review of its operations in Asia which contributed AU$15 million in earnings, up from AU$2 million last half.
“We have always taken a measured approach to Asia and we believe this is the right time to review the immediate and longer term strategic options for our individual Asian businesses given the limited expansion opportunities,” Harmer continued.
The firm said that for the full year, it expects low single digit GWP growth alongside a reported insurance margin in the range of 15.5-17.5%.
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