IAG reports jump in NZ profit
Thu, 23 Aug 2012 1:01p.m.
By Pam Graham
Insurance Australia Group's New Zealand subsidiary, the nation's largest general insurer, has reported a $A103 million ($NZ133.1m) annual profit compared with $A3m the previous year.
The result for the year ended June 30 reflects a 27 percent increase in gross written premiums.
The subsidiary of Australia's largest insurance company, which has the State Insurance, AMI, and NZI brands, has been the target of protests from disgruntled policy holders in Christchurch but its results show a healthy revival in earnings.
Profit in the 12 months ended June 30 is a turnaround from a $A87m loss in the second half of the previous year.
New Zealand gross written premiums were $A1.2 billion, a 24 percent increase in local currency terms.
The insurer is predicting growth in gross written premiums in 2013 from a combination of increased premiums and a full-year contribution of the AMI business it purchased.
The AMI integration was well advanced and would produce cost synergies of $30m in two years, the company said. The government kept the Christchurch earthquake liabilities to facilitate the sale of AMI to IAG after the Christchurch earthquakes.
IAG has 55 percent of the home contents market in New Zealand and 60 percent of the motor insurance business.
"Significant rate increases have been implemented to recover substantially higher reinsurance costs," the company said.
It said it was working with the Earthquake Commission (EQC) to resolve issues for Christchurch residents.
The company acknowledged that customers were finding it more difficult to afford insurance with a trebling of EQC levies and it said it was working on underwriting initiatives to address this.
It reiterated that it is interested in entering the workplace insurance market if the government opens ACC to competition.
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5/09/2012 9:53:19 a.m.
Nan McConnochie wrote:
With IAG lack of results in Chch I would predict sentiment will evolve at a pace that will make the Australian company face ongoing forward problems in their business. I for one having left Chch and homeless will not ever look to insure with them. Jobs lost and no insurance cover for many, no we won't forget. Company's like this should be black listed.
23/08/2012 5:35:53 p.m.
NO SURPRISES wrote:
Considering that IAG were voted the worst performing insurer in Christchurch, it comes as no surprise - they are not paying out. IAG/State still owe me over $70K on my contents insurance (and my losses were all verified by IAG). Don't get me on my house as it was destroyed in Feb, but took them a year to actually call it a 'rebuild'. I'm now waiting for my scope so I can receive my options, ie rebuild on my current site, rebuild elsewhere or buy another home elsewhere .... I can see this scope taking another year, thereby State can keep making interest on my money.
23/08/2012 1:24:19 p.m.
This profit results from increasing premiums and delaying payments for claims, particularly in Chch - see InsuranceWatch.org.nz
A clear case of profiteering on the misfortune of others! The Commerce Commission / FMA needs to investigate urgently.
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