IAG this morning forecast a 50% fall in its full-year net profit and announced a reshuffle of key executives.

The most significant changes will take place in New Zealand, with IAG NZ CEO Ian Foy becoming CEO of the group’s UK business. His replacement is the CEO of direct niche insurer The Buzz, Jacki Johnson.

IAG’s forecast net profit for the full year is now $91 million, compared to the $181 million the group earned in the previous financial year, while the insurance margin of 7% is in line with previous revised guidance of 6-7%.

An expected insurance profit of $493 million compares to $515 million the previous year, while net earned premium is expected to fall 1% to $7.1 billion.

CEO Mike Wilkins says the March storms in Melbourne and Perth have combined with a deteriorating UK bodily injury claims experience to dampen IAG’s earlier forecasts.

“While this year’s financial result does not reflect the expectations we held at the outset of the year, I’m encouraged by the clear and ongoing improvement in the operational performance of our businesses in our home markets of Australia and NZ,” he said, citing an expected insurance margin of 10.5%-12.5% next year.

Mr Foy’s return to his homeland will also see the departure from the group of present UK CEO Neil Utley.

Group Executive Leona Murphy will succeed Ms Johnson as CEO of The Buzz.

Mr Wilkins says Mr Foy’s successful track record in improving the NZ business and experience in the UK intermediated motor market makes him a standout candidate to lead the UK business.

“Ian has extensive insurance industry experience, which will be crucial as he drives the comprehensive remedial plan we announced last month,” Mr Wilkins said.

He says IAG reached a mutual agreement with Mr Utley that “now was the appropriate time to introduce new leadership to take the UK business forward”.

Mr Foy will take up his new role on September 1, with Mr Utley stepping down on September 30.

Ms Johnson will assume her new role as head of the NZ business from November 1, with NZI Executive GM Karl Armstrong serving as NZ CEO on an interim basis.

Mr Wilkins says Ms Johnson’s experience in workers’ compensation will be invaluable to the future of the NZ business should the state-run Accident Compensation Corporation be opened up to competition from private insurers.

Her replacement, Ms Murphy, will retain her existing responsibilities, which include corporate development and strategy.

IAG will report full details for the year ended June 30 on August 26.