IAG has released its financial year 2021-2022 (FY2022) results, announcing a net profit after tax of $347 million, contrasting sharply with the $427 million loss the company recorded for FY2021. CEO Nick Hawkins said the result reflects the performance of the underlying core business and a $200 million pre-tax release from the business interruption provision.
Gross written premium (GWP) grew 5.7 per cent (FY2021: 3.8 per cent) and while the growth predominantly reflected rate increases to offset inflationary pressures in the supply chain and natural perils, retention rates improved over the year.
The reported insurance margin of 7.4 per cent was below IAG’s expectation due to a higher natural perils cost of $1.119 billion versus its allowance of $765 million, a $45 million negative credit spread impact, and a $172 million strengthening of prior year reserves. The underlying insurance margin was 14.6 per cent (FY2021: 14.7 per cent).
GWP growth in the Direct Insurance Australia business was 4.6 per cent, while the underlying margin remained at 20.5 per cent. Hawkins said IAG continues to see good signs from its Intermediated Insurance Australia business with GWP growth at 6.0 per cent (FY2021: 5.6 per cent) while its underlying insurance margin was five per cent (FY2021: 3.9 per cent).
“Our FY2022 financial results reflect the quality of our underlying business as we build a stronger and more resilient IAG,” Hawkins said. “We had strong GWP growth, and the performance of our business was steady despite the challenging external environment.”
According to Hawkins, IAG is on track to deliver against its strategic priorities.
“Our customer numbers in the NRMA Insurance business grew as we rolled out the brand in Western Australia and South Australia, and brought customers over from our intermediated brands,” he said.
“Our New Zealand business saw a solid increase in GWP over the year, and our Intermediated business has been reset and positioned for growth under a new leadership team with deep experience and expertise.”