The New Zealand arm of Australian insurance giant IAG says its gross written premium climbed above $2 billion in the first half of its 2024 financial year, reflecting premium rate increases in response to inflation pressures and reinsurance costs.
Gross written premium in NZ shot up 18.8% to NZ$2.015 billion in the six months to December 31 2023, up from NZ$1.696 billion in the first half of the previous financial period.
IAG is NZ’s biggest general insurer and includes the AMI, State and NZI brands. It says the gross written premium growth in the NZ business was in response to higher perils, inflation pressures and reinsurance costs.
IAG New Zealand’s Chief Executive Amanda Whiting says having a sustainable and “strong” insurance business remains a key focus for the insurer as more extreme weather events and growing risks continue to occur.
“For instance, the 2023 North Island floods and Cyclone Gabrielle events are still having a profound impact on our communities, and we are working hard to resolve our customers’ claims as quickly as possible.”
She says IAG has now received a total of over 52,000 claims from both the North Island floods and Cyclone Gabrielle.
Of those, 99% of motor, 99% of contents, and 96% of home claims have now been settled, with IAG’s insurance payouts topping $1 billion, making it the most expensive climate disaster the insurer has had to tackle after the Canterbury earthquakes.
“A strong insurance sector, with the financial strength to meet the needs of New Zealanders is just one part of the equation, which is why we will continue to work closely with local and central government to make a real difference around flood resilience,” Whiting says.
“To keep New Zealanders safe, and insurance available and affordable, we must reduce flooding and natural hazard risk through good planning decisions, investment in protection and resilience measures, and where necessary, through relocating people away from at-risk properties.”
IAG NZ reported an insurance profit of A$204 million in the first half of the 2024 financial year, up from A$136 million in the previous corresponding period – an A$68 million increase.
The local division of the Aussie insurer says this translated to a reported insurance margin of 20.8%, up from the 15.2% insurance margin reported in the first financial half of the 2023 year.
The insurance margin increase in New Zealand reflected a combination of “higher earned premium, lower natural perils costs, and stronger investment income.”
Strongest in nine years
IAG’s Managing Director and Chief Executive Nick Hawkins says the group’s gross written premium growth was the strongest it had been in nine years and was up 12.5% to A$7.9b across the group.
“The margins and underlying claims ratios in Australia and New Zealand improved, and we are on track to meet our FY24 [full-year 2024] financial guidance,” he says.
Reported insurance margin for the group in the six months to December 31 widened to 13.7%, up from 8.5% while net profit after tax came to A$407 million, down from A$468 million in the previous corresponding period.
Hawkins says in the first half of the 2024 financial year, IAG settled more than A$6 billion in around 730,000 claims across Australia and New Zealand.
This was 10.1% higher than the $5.45 billion spent in claims in the first half of the 2023 financial year.
IAG’s board has determined to pay an interim dividend of 10 cents per share, 40% franked, up from 6 cents per share in the first half of the 2023 financial year.
