IAG has released its FY22 results which show the a net profit of $347 million and gross written premium (GWP) growth of 5.7%.
The net profit of $347 million is a huge step up from last year's $427 million loss.
“Our FY22 financial results reflect the quality of our underlying business as we build a stronger and more resilient IAG. We had strong GWP growth, and the performance of our business was steady despite the challenging external environment," stated CEO Nick Hawkins in the financial report.
"GWP grew 5.7% (FY21: 3.8%), and while the growth predominantly reflected rate increases to offset inflationary pressures in the supply chain and natural perils, retention rates improved over the year. Our reported insurance margin of 7.4% was below our expectations due to higher natural perils cost of $1,119 million versus our allowance of $765 million, a $45 million negative credit spread impact and a $172 million strengthening of prior year reserves. The underlying insurance margin was 14.6% (FY21:14.7%)."
The insurance giant has seen strong growth in New Zealand. "Our New Zealand business performed well with 7.0% NZ currency GWP growth (FY21: 2.8%) reflecting growth across its commercial insurance and direct brands with a volume increase in commercial motor."
Commenting on the launch of the brand in WA and SA he said: "We are on track to deliver against our strategic priorities. Our customer numbers in the NRMA Insurance business grew as we rolled out the brand in Western Australia and South Australia and brought customers over from our intermediated brands."
He also said: "While it is early days, we’re pleased with the progress against our aim to deliver $400 million of value through claims and supply chain effectiveness. We launched the Online Motor Claims tracker in May, which now has more than 170,000 customer interactions. Our online digital claims lodgements have increased, and the benefits are starting to flow through from our motor repair model program. [Repairhub]
Commenting on the wild weather events Hawkins said: "Climate change and its impact on our customers and communities is one of the most important challenges we face as a business. FY22 was one of the most significant peril years we have experienced, with multiple events in Australia and New Zealand, including the February 22 floods in northern New South Wales and along the east coast.
"Across Australia and New Zealand, claim lodgements relating to extreme weather events in FY22, more than doubled over the prior year. To deal with the increasing severity and frequency of extreme weather events, we have put in place our largest to date perils allowance, increasing it by 19% to $909 million for FY23."
To read more download IAG announces FY22 results