IAG reports solid results despite challenging market

IAG reports solid results despite challenging market | Insurance Business Australia

Insurance News

IAG reports solid results despite challenging market

Group outlined challenges it has faced in recent years

Insurance News

By
Roxanne Libatique

Insurance Australia Group (IAG) has reported solid results for the 2023 financial year (FY23) despite facing a myriad of challenges.

In a press release, IAG revealed that its gross written premium (GWP) jumped by 10% from the 2022 financial year (FY22) to $14.7 billion. Its net profit after tax rose by a whopping 140% to $832 million, mainly due to an increase in insurance profit, improved returns on shareholders’ fund investment portfolio, and the post-tax $392 million reduction in the business interruption (BI) provision in 2023.

Over the year, IAG’s total shareholder return, composed of share price growth and dividends, totalled 33%.

The group’s capital position also remained strong in FY23, enabling the board to increase the final dividend to 9 cents per share, resulting in a full-year dividend of 15 cents per share and a payout ratio of 83% net profit after tax.

Challenges facing IAG

Commenting on the latest financial results, IAG managing director and CEO Tom Pockett reflected on the challenges that the group has faced in Australia and New Zealand over the past two years, including extreme weather events.

“The last two years has seen a very challenging environment for Australia and New Zealand and of

course, our company. This period included the highest levels of peril events in Australia and New

Zealand since the NZ earthquakes in 2010 and 2011. The company dealt with over 377,000 claims

related to these events over this period,” Pockett said. “This combined with the inflationary effects of the world coming out of COVID, which has increased our costs of servicing claims. Together with higher reinsurance costs, this has led to a very challenging period for IAG and insurance companies globally.”

Pockett further noted the extreme weather events and floods in New South Wales (NSW) during the beginning of the financial year, which led to a mountain of claims, mostly from storm damage to homes, properties, and vehicles.

“We pride ourselves on our ability to support our customers at their time of need, and this was the case in these extreme events, as well as for the many other everyday claims,” he said. “The board and I are sincerely thankful to our teams, especially our front-line teams, who managed through this complexity, and who continue to serve IAG’s customers. Our financial performance over the year was solid given these challenges.”