IAG isn’t the only insurer with a bottom line bruised by volatile equity markets. AMP also saw its half-yearly profit fall 25% to $303 million, compared with a $403 million profit in the previous half.

The result includes an investment loss of $6 million on shareholder capital, compared with a $25 million gain in the first half of 2001. However, core recurring operating margins increased by 3% to $470 million. The figure also includes a non-recurring margin loss of $14 million, largely due to UK restructuring costs.

Like Michael Hawker, CEO Paul Batchelor was quick to point out that the actual operating businesses performed well given the tough market conditions. “Clearly we want our business to do better but in the context of difficult markets, this is a solid result,” he said.

“AMP has reduced the cost-to-income ratios across the business and the group as a whole, underpinning the modest growth in core recurring operating margins and an increase in the value of new business in our Australasian and UK retail businesses.”

Mr Batchelor said AMP will continue to focus on three short-term priorities: return on capital, building the UK Financial Services arm and cost management.