IAG exceeded operating targets for the first three months of the year, but bottom-line earnings are still being hurt by falling equity markets, shareholders were told at the insurer’s AGM last week.

Chairman James Strong said the businesses in Australia and NZ delivered a strong result in the first quarter, exceeding all key targets. “As to the current financial year, we are confident we can continue to deliver a solid underlying operating performance and, barring catastrophes, should achieve our operating targets for the insurance business.”

CEO Michael Hawker said strong renewals and new business volumes have delivered growth in gross written premium slightly higher than the 5%-9% target range for the first quarter. “Our combined ratio remains below 100%. Both our short and long-tail businesses are performing ahead of their target operating ratios.”

Mr Strong said the acquisition of CGU and NZI announced last month will position IAG well for the future. “We anticipated there would be an initial adverse effect on our share price following the share placement to fund the transaction,” he said. “However, there is a growing understanding of the advantages the acquisition creates for IAG both now and into the future.

“It brings growth in the right market segments and greater diversity in our business mix and geographic spread in line with our five year strategic plan.”