IAG has released its financial results for the first half of financial year 2022, reporting an insurance profit of $282 million (H1 2021: $667 million) and a net profit of $173 million compared to a $460 million loss in H1 2021. The company said the figures were impacted by natural perils costs of $681 million, largely from severe weather events in October, along with modest reserve strengthening.
IAG reported a COVID-19 net benefit of around $55 to $65 million, similar to H1 2021, reflecting low motor claims frequency offset by elevated claims costs, with risk margin held for an uncertain operating environment in the second half of FY2022.
Gross written premiums (GWP) grew 6.2 per cent to $6.6 billion, while the underlying insurance margin improved to 15.1 per cent (FY2021: 14.7 per cent).
While GWP growth was primarily rate driven, Nick Hawkins, IAG Managing Director and Chief Executive Officer, said the company achieved new customer growth of 3.3 per cent and strong retention across its key motor and home lines in its direct Australian business. During the half, IAG rolled out NRMA Insurance in Western Australia and South Australia, with the initiative contributing to GWP growth through new customers.
IAG has upgraded its FY2022 GWP guidance from low- to mid-single-digit growth, reflecting business confidence and future economic outlook.
“IAG delivered a solid performance in 1H22, reflecting the foundations we have put in place to create a stronger and more resilient IAG,” Hawkins said. “We’ve reset the business with a simpler operating model, new leadership, and a clear strategy for growth which we are investing in to create long-term value for our stakeholders.”
Hawkins said the scale of IAG’s claims operations and supply chain are delivering faster, more efficient claims experiences. “Our motor repair model, which includes Repairhub and Motorserve, is helping keep repair costs down while our simplified claims technology platform is leveraging automation and artificial intelligence to help us make faster claims decisions.”
IAG is aiming to improve customer experiences, especially across its digital channels, with the company’s direct business in Australia targeting $400 million of value through initiatives to increase claims and supply chain effectiveness. Hawkins said IAG wants 80 per cent of customer activity to be digital in five years.