Overseas earnings will be key for IAG
IAG has seen its second-half profit slump because of falling premiums and below-par investment returns. Net profit after tax fell more than 25% from a year ago to $345 million, with insurance margins cut by nearly 2% to 13.3% as the insurer dropped premiums to secure market share.
Following profit rises from rivals Suncorp-Metway and Promina earlier in the week, IAG CEO Michael Hawker must be disappointed. He says a softening market, particularly in commercial lines and short-tail personal insurance, has eaten into IAG’s profitability.
Gross written premiums in the company’s largest Australian division, personal lines, fell 0.7% to $1.92 billion in the six months to December 31. Commercial lines gained 0.7%, or $5 million, to $766 million.
Mr Hawker says he will continue to diversify the company through global growth to guard against local fluctuations.
In December he signed off on a $1.1 billion deal to buy UK car insurer Equity Insurance, with UK companies Hastings Insurance Services and Advantage Insurance added to IAG’s UK operations in September for $350 million.
Following profit rises from rivals Suncorp-Metway and Promina earlier in the week, IAG CEO Michael Hawker must be disappointed. He says a softening market, particularly in commercial lines and short-tail personal insurance, has eaten into IAG’s profitability.
Gross written premiums in the company’s largest Australian division, personal lines, fell 0.7% to $1.92 billion in the six months to December 31. Commercial lines gained 0.7%, or $5 million, to $766 million.
Mr Hawker says he will continue to diversify the company through global growth to guard against local fluctuations.
In December he signed off on a $1.1 billion deal to buy UK car insurer Equity Insurance, with UK companies Hastings Insurance Services and Advantage Insurance added to IAG’s UK operations in September for $350 million.