Insurance Australia Group (IAG) CEO Mike Wilkins has exercised 96,200 deferred award rights in the company at a rate of $1 each under a deferred award rights plan.

Last week IAG shares were trading at $3.43 per share, valuing the shares at more than $230,000.

Under the terms of the rights plan, Mr Wilkins was able to exercise the rights from July 1, and now holds a total of 226,366 IAG shares, worth more than $770,000.

IAG’s policy restricts the trading of these shares to three four-week “trading windows” during each year.

The incentive follows IAG’s third profit downgrade for the year following damaging losses from its UK motor insurance business and recent Australian storms.

Like many companies, IAG encourages directors and employees to be long-term shareholders, with rights plans a standard offering in most executive pay plans.

Mr Wilkins holds a further 90,500 deferred award rights.