IAG remains on course to deliver its earlier guidance of an insurance margin of 10-12% and gross written premium growth of 6-9% this financial year, CEO Mike Wilkins told last week’s AGM.

He says this financial year has started with encouraging growth in gross written premium and a period of relatively benign natural peril activity.

The troubled UK business will move towards break-even next financial year due to the company’s remedial action and the UK Government’s announcement that it will regulate contingency fees charged by lawyers.

The UK proposes to cap contingency fees in a bid to reduce insurance costs and “contingency fee agreement blackmail” where insurers settle in a bid to avoid mounting legal costs.

IAG Chairman Brian Schwartz told the meeting recent visits to the UK “have reinforced my confidence that we now have the right team and are pursuing the right strategy for this business”.

The UK losses and the company’s move into India and China concerned shareholders who asked questions about how IAG would avoid in Asia a repeat of what they referred to as “the debacle in the UK” and the “UK fiascos”.

Mr Schwartz said much time has been spent reflecting on the lessons learned from the UK, where IAG reported an insurance loss of $181 million in the year to June 30, and a new management team is in place there.

IAG now looks at what it has to offer any new market, he said.

The company probably did not have enough to add in the UK, but this isn’t the case in Asia, where it is “insisting in having our people in the key underwriting and risk areas”.

Mr Schwartz says IAG would like to increase its 20% share in Chinese company Bohai Property Insurance, if permitted by regulators.

Senior IAG managers are in senior positions there, “so we will have a good feel on it from day one”.