Insurance Australia Group (IAG) has increased profit from its New Zealand business by 20% this year, despite the group’s overall profit falling 30%.
IAG’s full year results released today show its NZ business increased insurance profit (underwriting result plus investment income on assets backing technical reserves) to NZ$239 million from NZ$199 million last year. That’s a rise of $40 million, or 20%.
However the Group’s insurance profit decreased by A$476 million to A$1.103 billion from A$1.579 billion.
IAG is New Zealand’s largest general insurer owning State, Lumley NZI and AMI. Its New Zealand business makes up 20% of the Group’s gross written premiums (GWP).
IAG New Zealand has reported GWP (total amount of insurance premiums received) growth of 19% over the year to $2.436 billion, while the Group has reported GWP growth of 17% to A$11.440 billion.
The company says this strong growth in New Zealand reflects the first-time contribution from Lumley, following its acquisition as part of the Wesfarmers transaction.
It notes that without this contribution, GWP fell slightly, reflecting “softening premium rates and additional capacity in commercial lines, and ongoing aggressive competition across the intermediated business”.
IAG describes its New Zealand result as a strong one in a competitive environment, with an underlying margin of 15%.
More to come soon…