Australian insurer IAG has explained that higher reinsurance costs are a factor in its decision to increase premium rates for its customers across several lines of business.
Speaking at the company’s annual general meeting, Chairman David Armstrong noted that the company performed well through the 2022 financial year despite facing a number of challenges.
Gross written premium grew by almost 6% to just over $13 billion and net profit after tax was $347 million, compared to a $427 million loss in the previous year.
This was despite IAG having to strengthen prior period reserves, and respond to the high number of natural peril events, including 2,000 claims from the recent flooding in southeastern Australia, as well as volatile investment markets, and a higher inflationary environment.
As such, it is forecasting mid-to-high single digit growth in gross written premium for 2023 and a reported insurance margin is for a range of 14% to 16%.
But looking ahead, it also anticipates a continuation of trends from the last financial year, including higher reinsurance costs and inflationary pressures.
Accordingly, IAG plans to increase its premium rates across home, motor and our commercial insurance classes.
“Some of the issues we’ve been forced to confront have been challenging for us,” acknowledged Nick Hawkins, Managing Director and CEO. “We’ve had to reevaluate how we run and manage our company.”
