IAG suffers loss in full-year results

IAG suffers loss in full-year results | Insurance Business New Zealand

IAG suffers loss in full-year results

It’s the turn of general insurance giant Insurance Australia Group Limited (IAG) to reveal how it fared in the full year ended June 30, 2021 (FY21), and the numbers are something of a mixed bag.

Here’s how IAG performed in the period:

Metric

FY21 result

FY20 result

Gross written premium (GWP)

AU$12.6 billion

AU$12.1 billion

Insurance profit

AU$1 billion

AU$741 million

Net profit/(loss) after tax

AU$(427) million

AU$435 million


According to the insurer, its net loss reflects the impact of unusual items including a AU$1.15 billion business interruption pre-tax charge and an additional AU$238 million pre-tax charge for customer refunds.  

Meanwhile, IAG’s underlying insurance margin stood at 14.7%, down from the previous year’s 16%. Reported insurance margin improved from 10.1% to 13.5% this time around, partly because of positive credit spread impact and further net reserve strengthening.

Commenting on the figures, managing director and chief executive Nick Hawkins stated: “We are pleased with the underlying financial results we are delivering today. Our FY21 business performance is sound and reflects the strength of our core insurance business and its market-leading brands. The underlying margin of 14.7% is within expectations, and we’ve reinstated guidance for FY22, reflecting the confidence we have in our business and economic outlook.

“Our Australian and New Zealand direct businesses have generated solid growth, and we’ve enhanced our focus on our intermediated business in Australia to resolve the challenges we’ve seen with some of its portfolios, and to drive greater profitability.”

Hawkins also noted that the increase in GWP, while mainly rate-driven, can be attributed as well to “promising” new business growth and stronger customer retention.

The group boss added: “I’m confident that the strong leadership team I’ve established, the new organisational structure we have in place, and the strategy we’re executing will deliver business and customer growth.

“IAG is a company guided by a clear purpose ‘to make your world a safer place’ that makes a real difference to our customers and communities. I’m focussed on IAG’s long-term future, and together with my leadership team and our people, we will build a stronger, more resilient company.”