Australian insurer IAG is reporting that it saw net profits after tax of $347m in the year ending June 2022.
The firm said that the results, which are still subject to finalisation and require Board approval, show a reverse from a $427m loss for the year ending June 2021. The results also include growth in gross written premiums of 5.7% in FY 2022, up from 3.8% in FY 2021.
Nick Hawkins, CEO and managing director of the firm, said in a statement: “Our preliminary FY22 results reflect high natural perils and volatile investment markets. We have also strengthened our reserves following adverse experience in our commercial liability portfolio from prior accident years. The FY22 preliminary underlying results reflect the positive momentum we’ve achieved as we build a stronger, more-resilient IAG.”
He added: “Despite the challenges, we have seen in the external environment over the year, our business have performed well, delivering strong GWP growth. Our direct insurance business in Australia is growing in key segments, particularly as we roll out the NRMA Insurance brand in Western Australia and South Australia.”
IAG also reported an insurance profit of $586m, which it said represented a margin of 7.4%, down from 13.5% in FY 2021, and which was below the guidance range of 10% to 12%. This reflected, it said, new natural peril costs of $1,119m, $354m above the original allowance of $765m; prior period reserve strengthening of $172m; and negative credit spread impacts of $45m.
Back in February, the firm said its insurance profit totalled $282 million for 1H22, compared to $667 million in the prior year period, as the firm was impacted by significant natural perils costs of $681 million.
The company reported a cost of around $200 million for events that incurred in the three-month period ending 30 September 2021, including flooding in Westport, New Zealand and the Mansfield earthquake that impacted Victoria.
This was followed by a loss of $141m for weather events across Eastern Australia in October 2021, and a further $169m attributable to the South Australian hail and Victorian windstorm event that occurred at the end of the month.
The firm said only a few weeks ago that it had finalised its aggregate reinsurance cover the financial year ending 30 June 2023.
In a statement, the firm said that its FY23 cover provides protection of $350m in excess of $500m, the latter figure up from $400m from last year. Like last year, individual qualifying events capped at $200m in excess of $50m per event.
In addition, the firm said it had added third and fourth event financial year occurrence covers to give it $100m of protection for events greater than $150m.
