IAG: Later to turn but NZ market is hardening

IAG: Later to turn but NZ market is hardening | Insurance Business

IAG: Later to turn but NZ market is hardening
Price increases look set to continue throughout the 2018 financial year, an insurance boss has said, with the property and commercial motor markets the ones to watch.

Speaking after the release of their FY17 results, Peter Harmer, managing director and CEO of IAG, said that the firm expects to see increases continue over the coming year.

“I don’t want to signal anything too strongly but yes the momentum we closed FY17 with will continue into FY18,” Harmer said.

“New Zealand was slightly later to turn and I think New Zealand’s turn was primarily initiated through the Kaikoura earthquake,” he elaborated. “We are seeing general increases across all property classes in New Zealand but those increases are more pronounced in the Wellington zone as you’d expect.”

Harmer said that the business was “very appreciative” of the support it has received from brokers over the last 12 months as the firm pushed through rate rises.

“We have been very pleased with how we have been able to retain business through our broker channel at a time when we have been pushing prices up to get them back to a more sustainable technical level,” he said.

Although profits increased by 48.6% over the course of the year, shares in IAG dropped more than 7% as the firm signalled narrowing profit margins for the year ahead. It said it expects to post low single digit GWP growth over the coming year, as the metric will take a $60 million hit when the firm exits the motorcycle dealership channel with its Swann Insurance brand.

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