IAG is another major insurer who has reported easing of claims from natural disaster events has help deliver a company profit in the last financial year.
IAG’s 2023/24 full-year results show a net profit of $898m, up 7.9 per cent on the previous year.
This was driven by an 11 per cent rise in net earned premiums, an improvement in the insurance profit, and higher investment income on shareholder.
The insurance profit of $1,438m was up 79.1 per cent on last year with a reported margin of 15.6 per cent.
The company’s natural perils costs of $983m were $115m below the $1098m allowance and helped this insurance profit, the company reported.
Direct Insurance Australia is IAG’s largest business division and over the past year has consolidated its go-to market brands from eight to three: NRMA Insurance, RACV Insurance and a digital brand ROLLiN’.
Direct Insurance Australia insurance profit rose 19 per cent to $654 million.
IAG Managing Director and CEO Nick Hawkins company’s result was driven by a combination of growth in premiums, stronger investment returns, and less volatile weather in Australia and New Zealand.
“Today’s result reflects the strength of the IAG business as well as the operational improvements we have implemented.
“The trust our customers have in our brands is reflected in continued high customer advocacy and retention in our retail businesses in Australia and New Zealand. We are well positioned to continue supporting our customers and the broader economy.”
Growth areas
“The strategic measures we have put in place over the past few years have created a stronger and more resilient IAG. We’ve streamlined our Australian business, established a clear brand strategy and launched NRMA Insurance nationally, outside of Victoria.
We have also improved our claims management capability to ensure we are well placed to support our customers when they need us the most.
“We’ve delivered on our target of at least $250m in insurance profit from our Intermediated Insurance Australia business, and significantly improved our technology platform that delivers the products and services we provide to our retail customers.
“New Zealand saw a material uplift in our pricing capability and risk management as we migrated policies to the Enterprise Platform. We strengthened our retail presence, launching AMI Insurance Hubs for in-person customer support, while expanding the AMI RepairHub.”
Inflation and other Pressures
“We have previously said inflation, increasing weather volatility, and rising reinsurance costs were major factors affecting customer premiums. We are beginning to see some signs of inflation easing, and our long-term reinsurance agreement announced in June is expected to reduce year-on-year volatility from extreme weather events and help stabilise costs for our customers over the longer term.
“We recognise premium increases are affecting customers, and we’ve bolstered our support for those impacted by cost-of-living pressures. Our specialised customer care teams are helping those in financial hardship by finding tailored solutions and providing extra support.
“This year, we’ve also enhanced training for our frontline teams and introduced AI tools to better identify and assist vulnerable customers.”
“We have commenced migrating more than five million insurance policies to our Enterprise Platform, delivering significant improvements in customer experience and enabling us to better price and manage risk. The platform is designed to support our current operations, but it also allows us to execute with scale and agility, driving future growth and innovation across the Group.”