Close×

IAG reported a 2016 financial year (FY) insurance profit of $1.18 billion, a 6.8 per cent increase on FY15 ($1.10 billion) equating to a reported insurance margin of 14.3 per cent (FY15: 10.7 per cent).

IAG called this “a sound result in light of relatively flat gross written premium (GWP), which reflects challenging operating conditions in the Australian and New Zealand commercial markets”.

The company also announced a $300 million off-market share buyback, reflecting IAG’s strong capital position.
IAG says its profitability remains strong with an underlying margin of 14.0 per cent (FY15: 13.1 per cent).

IAG managing director and CEO, Peter Harmer, said he was pleased with the solid performance of the Group and felt confident about the business as it enters FY17.

“We’ve seen solid growth and strong profitability in our personal insurance lines in Australia and New Zealand, primarily driven by GWP growth for home and motor.

“Our commercial businesses in Australia and New Zealand have withstood continuing price pressure and maintained their strict underwriting discipline which has resulted in lower business volumes as we exited unprofitable business – but we are encouraged by growing signs of rate improvement,” Harmer said.

“Everything we do at IAG is structured to present our customers with products and services that make their lives better and safer. We want to lead the change that is happening in their lives – and our industry – rather than just reacting to it.

“This is the rationale behind our organisational design, including the establishment of IAG Labs and IAG Garage, where we experiment with emerging technology such as drones, the connected home and collision avoidance technology.

“By doing this successfully we can continue to deliver world class customer experiences, based on a deep understanding of our customer, while ensuring IAG is as financially healthy and efficient as possible. This in turn will allow us to reinvest in continuing our leadership,” Harmer said.

The company also outlined activities being undertaken to drive greater operational efficiencies that, it says, will reduce its cost base in ways that actively improve the customer experience.

This includes a technology simplification program which will reduce 32 policy and claims platforms down to two, the consolidation of its insurance licences from nine to two and operational partnering with offshore-based global service suppliers to access their specific expertise and economies of scale.

IAG will hold an investor briefing in December this year to provide an update on its company strategy.

comments powered by Disqus