IAG managing director and CEO Nick Hawkins said there was a strong underlying performance despite the company making a loss for the six months to December 31, compared with a $283 million profit for the previous corresponding period. The loss was attributed to the expected cost of COVID-19 business interuption claims which Hawkins said was never intended to cover a pandemic. The company also reported growth in its customer base.
“We have seen a strong underlying performance across our businesses over the last six months and we will build on this performance as we sharpen our focus to deliver a stronger, more resilient IAG," Hawkins said.
"We delivered 3.8% gross written premium (GWP) growth (1H20: 1.4%) over the six months – a strong result in these uncertain conditions.
"Growth was predominantly driven by rate increases in our commercial and home insurance businesses in Australia and across all key classes in New Zealand. It was also underpinned by some customer growth in New Zealand’s direct brands and high retention rates in our commercial portfolios in Australia.
We have strong margins across the business. Our underlying margin of 15.9% was an improvement on 2H20 (15.1%) and benefitted from lower motor claims as a result of COVID-19.
Our insurance profit of $667 million (1H20: $501 million) equated to a higher reported margin of 17.9% (1H20: 13.5%). In addition to the COVID-19 effect, this result benefitted from a relatively benign natural perils period, which meant we came in $39 million lower than our natural perils allowance"
To read the results report click here.