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IAG happy with the numbers in New Zealand

Wednesday 24th October 2012 3 Comments

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Insurance Australia Group, the insurance company besieged by angry clients in Christchurch, has told shareholders it is happy with its strong operating performance, which will improve further in New Zealand.

IAG has fronted angry mobs in the city as residents, particularly those on unstable land, have vented frustrations at the slowness of claims payments.

Some clients have been caught between the Earthquake Commission, which pays out the first $100,000 of earthquake claims and private insurance companies. IAG owns the NZI, State and AMI brands, giving it 55 percent of the home and contents market and 60 percent of the motor insurance market in New Zealand.

Chief Executive Mike Wilkins told the annual meeting in Sydney yesterday that a highlight of the 2012 financial year was a significant increase in profitability in New Zealand and the momentum achieved was expected to continue in 2013.

The company achieved an insurance margin of 10.4 percent in its New Zealand business in its 2012 financial year, up from 0.4 percent the previous year. It increased gross written premiums by 26.6 percent and expects further growth in 2013.

The company expects further synergies from the integration of the AMI business to improve earnings in 2013.

It has previously said that AMI will generate at least $NZ30 million per annum in net synergies within two years.

A shareholder asked why the company had paid $A296 million for AMI when it had $A60m of net identifiable assets. The rest was "intangible and hot air".

He was told that AMI was a very, very good brand and the business would generate substantial value in terms of savings in the New Zealand market.

AMI brought half a million new customers to the company and its business was complementary to the existing State Insurance business IAG had in New Zealand.

Wilkins told shareholders the company was pleased at how its business had met the needs of earthquake-affected customers in Christchurch and there had been sound progress in dealing with these claims.

It was a difficult situation in Christchurch but at June 30 the company had paid $1.3 billion in claims.

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Comments from our readers

On 24 October 2012 at 11:21 am IAG said:
IAG (Craig Dolwing) responds. It is inaccurate at worst, and highly subjective at best to use the term 'beseiged' and to refer to 'angy mobs' in this article. Such terminolgy does a disservice to the majority of people in Canterbury and those such as IAG working on the recovery. IAG is under the same pressure as everyone else to settle customer claims and is working hard and making progress. It is a strong insurance group determined to be a leader among insurers. As background and context to the headline, IAG representatives met with a group of less than 100 people for an hour or so on one day several months ago. That group included a range of interest groups including the Campaign Against Foreign Ownership of Aotearoa (just to put this in perspective). Many of the people in attendance were not customers of IAG brands. They were marching from another venue that we were near, so we weren't the primary focus. They were making a point, and IAG was happy to listen to their insurance concerns. Fewer than half a dozen people completed forms relating to specific issues they had. They were not a mob. A few were angry for sure but IAG was there to show respect for their views and provide information. IAG has been active trying to address very complex issues and also leading insurance discussions at CERA and community led public meetings. Fronting up is the approach we have taken, and intend to continue to take as we think it is an approach our customers appreciate - although not eveyone is happy all the time.
On 28 October 2012 at 1:19 pm Shame on IAG said:
Shame on you IAG for trying to justify your appalling behaviour. People can simply look at the results from Insurance Watch and merely scan social media resources for the truth! You can't hide forever. While you might be able to suppress some of the media and get political backing to hide behind, the truth is leaking out. Sure you would be happy with your performance at the cost of your victims -- your customers. Shame on you. If we all get what we deserve in the end, best you make some preparations for Hell.
On 29 October 2012 at 1:50 pm Chch Guy said:
Nice try Craig. Sure sounded like a mob a couple of hundred metres from you. If things were so good, why did they march on you? www.insurancewatch.org.nz will open a few eyes.
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