IAG's insurance profits fell 33.4% to $496m and its net profit after tax is down 9.3% to $500m compared with 2019 first half results.
“IAG’s underlying performance has continued to improve over the half and was broadlyin line with expectations," CEO Peter Harmer said. "Top line GWP growth was largely driven by premium increases and included a positive exchange rate effect in respect of New Zealand.
"IAG’s reported margin of 13.7% was lower than 1H18, mainly due to the net natural peril claim cost outcome of $110 million above allowance after the December Sydney hailstorm. Lower prior period reserve releases and an adverse credit spread movement were also factors.
"We had a sound performance in Australia, where lower NSW CTP profitability in Consumer was more than offset by the
improved performance of our home and motor short tail lines. In Business, our performance improved due to cumulative premium increases and remediation benefits, as well as more normal large losses.
"IAG’s optimisation program is progressing in line with our plan, with a net reduction in gross operating costs of around $40m in the half," he said.
We’ve invested in giving customers greater clarity and they can now track the status of motor repairs via our smash repair network through SMS updates. Customers have responded positively to having access to up-to-date information about the status of their repair and we’ve now increased the availability of this service from 13 repairers to nearly 600."