IAG’s half-year profit up 50% on same period a year ago

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A slip in Titirangi at the time of the Auckland floods in January 2023.
Photo: RNZ / Samuel Rillstone

The country’s biggest insurer IAG’s half-year profit has surged as its premium income and margins rose, while disaster costs fell.

For the six months ended December, its New Zealand business reported an insurance profit of A$204 million (NZ$218m) – up 50 percent on the same period a year ago.

The Australian-based company’s New Zealand brands include State, NZI, and AMI.

Its gross written premium grew 19 percent to just over $2 billion, which it said reflected premium rate increases due to inflation pressures and high reinsurance costs.

The combination of higher earned premium (premium income), lower disaster costs and stronger investment income, meant its local insurance margin was 21 percent, compared to 15 percent a year ago.

IAG said it has received more than 52,000 claims from both the upper North Island floods and Cyclone Gabrielle in early 2023.

The insurer said 99 percent of motor, 99 percent of contents and 96 percent of home claims had been settled, with payouts topping $1 billion – which was second only to the 2010 and 2011 Canterbury earthquakes.

“We will continue to transform our business and do everything we can to ensure New Zealanders have access to appropriate insurance cover that is easy to understand and simple to buy,” IAG New Zealand chief executive Amanda Whiting said.

“A strong insurance sector, with the financial strength to meet the needs of New Zealanders is just one part of the equation, which is why we will continue to work closely with local and central government to make a real difference around flood resilience.”