Sharechat Logo

IAG lifts NZ insurance profit by 12 percent on AMI contribution, gains in GWP

Thursday 22nd August 2013

Text too small?

Insurance Australia Group's New Zealand unit posted a 12 percent gain in full-year insurance profit as the owner of the Lantern, NZI and State brands benefited from a 12-month contribution from AMI Insurance.

Insurance profit rose to A$115 million in the 12 months ended June 30, the Auckland-based division said in a statement. The size of the New Zealand business, as measured by gross written premium (GWP), jumped more than 30 percent to A$1.58 billion, largely as a result of the AMI purchase.

IAG acquired the 'good' assets of AMI last year for $380 million after the New Zealand rival was forced to seek a financial rescue from the government because the Christchurch earthquakes drained its reserves. AMI contributed a full year of premiums to its latest result, compared to three months a year earlier.

New Zealand chief executive Jacki Johnson said GWP also rose as a result of rate increases imposed to recover high reinsurance costs and new regulatory requirements. The insurer said it had spent $13 million to manage the legislated change to home insurance policies to sum insured.

Those costs and the need to build up reserves as a result of IAG's Canterbury earthquake recovery commitments, resulted in the New Zealand insurance margin shrinking to 8.9 percent from 10.4 percent a year earlier.

The company is on track to achieve synergy benefits of at least $30 million by April 2014 from the integration of AMI, it said.

The Australian parent, based in Sydney, today reported full-year profit more than tripled to A$776 million as premiums rose and it received fewer claims. Profit missed the A$819 million median estimate in a Bloomberg survey.

It will pay a final dividend of 25 Australian cents. The shares last traded on the ASX at A$5.93 and have gained 26 percent this year.

BusinessDesk.co.nz

  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:

NZ shares gain as market cheers Fletcher plans, Sky TV, A2, Auckland Airport rise
NZ dollar falls on tepid economic growth, rising greenback
Restaurant Brand affirms annual earnings guidance, on look-out for US director
Xero shooting for a million customers in UK as digitisation looms
Foreign farm buyer applications withdrawn in the past 12 months have tripled, OIO figures show
Fonterra satisfied with Beingmate's response to labelling error
Fletcher shares gain on five-year strategy to chase sales, margin growth
Gentrack acquires UK-based Evolve Analytics for 23 mln British pounds
NZ economic growth slows in first quarter as construction activity weakens
Independent expert to determine fair price for Chow Group shares after shareholders object

IRG See IRG research reports