Sharechat Logo

IAG's NZ premium growth and margins outpace Australia

Thursday 7th February 2019

Text too small?

Australian insurance giant IAG’s premium growth from its New Zealand operations was nearly twice as brisk as in its home market in the six months ended December, although down 42 percent from a year earlier.

IAG, which claims about 45 percent of New Zealand’s insurance market through brands including AMI, State and Lumley, reported 5.5 percent growth in New Zealand premiums in the latest six months, down from the 9.5 percent growth in the year-earlier six months in New Zealand dollars.

A slight foreign exchange benefit, compared with a drag in the previous first half, meant the growth in Australian dollars was 6.6 percent to A$1.268 billion, up from 5.5 percent to A$1.19 billion a year earlier.

In Australia, gross written premiums (GWP) grew at a more sedate 3.4 percent.

The New Zealand profit margin rose from 14.2 percent in the previous first half to 24.9 percent. That compares with the Australian profit margin of 10.7 percent, down from 11.4 percent.

IAG managing director Peter Harmer said that the New Zealand business “continued to perform well, with solid GWP growth supported by sustained margins.”

The margin improvement was largely driven by higher premiums with higher commercial rates partially offset by lower volumes, the company said.

About 59 percent of GWP were consumer policies and the remainder business. About 43 percent were sold directly, 41 percent through a broker or agent and 16 percent came from its “affinity” banking partners, ASB, BNZ, Westpac and the Co-operative Bank.

The IAG group reported an overall 9.3 percent drop in net profit for the latest six months with the result hit by net natural peril claims coming A$110 million above its allowance because of a freak hailstorm in Sydney in December.

IAG is forecasting total GWP growth of 2-4 percent for the year ending June, compared with 4.1 percent in the first half and a reported insurance margin of 16-18 percent compared with 13.7 percent in the first half.

That’s assuming net losses from natural perils for the year total A$608 million, reserve releases of about 2 percent and no material movement in foreign exchange rates or investment markets.

That would mean claims from natural perils coming in at no more than A$300 in the second half.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares rise; trading quiet ahead of upcoming earnings
NZ dollar firms against the Aussie heading into federal election
Fletcher-commissioned Deloitte report shows building material costs are low
RBNZ censures ANZ, prescribes risk capital calculation
RBNZ censures ANZ, prescribes risk capital calculation
SeaDragon shareholders back $4M injection to stave off liquidation
SeaDragon shareholders back $4M injection to stave off liquidation
Businesses get some reprieve in March quarter on cheaper prices
NZ manufacturing activity expands on month in April but down on year
Xero's CEO says it still has a cautious future in the US

IRG See IRG research reports