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



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.
Bookmark and Share   Printable version
Related News

Metroglass profit dips on Aussie expansion costs, capex looms
NZ dollar climbs back above 70 US cts as Fed minutes raise question over June hike
While you were sleeping: Wall St ticks higher
MARKET CLOSE: NZ shares rise, led by Arvida as upbeat earnings buoy investors
NZ dollar slips below 70 US cents
Plant & Food Research-Anagenix tie up on the verge of reaping benefits
Air New Zealand passenger numbers rise in April
Unite Union makes headway in talks with Restaurant Brands
SSC to probe Transport Ministry's treatment of whistleblowers
FMA licenses 201 firms under new securities law regime

IRG See IRG research reports