A half a billion dollar jump in natural catastrophe losses have knocked down IAG’s annual profits, with the insurance giant recording a 30% drop in profitability.
Overall insurance profit for the group fell from $1.6 billion to $1.1 billion, spurred in large part by a $495 million increase in natural peril claims.
However, tough market conditions were also felt by IAG’s commercial arm. Although the integration of Wesfarmers’ insurance properties boosted gross written premium by 40%, like-for-like GWP retracted slightly, reflecting lower premium rates and increasing competition.
IAG Managing Director and CEO Mike Wilkins says IAG is in a strong position in a market with high competitive pressures but they were focusing on ways to meet customers’ evolving needs.
“Our creation of IAG Labs will drive digitisation and innovation across IAG and its brands to ensure we meet and exceed customer expectations,” he says.
“It will do so by bringing together technology, customer insights and a venturing unit focused on business opportunities and disruptive technologies.”
IAG is also upping the focus on China, where it sees huge potential for growth.