By Alice Uribe
SYDNEY–Insurance Australia Group Ltd. said its half-year net profit more than doubled, but it kept its interim dividend stable as inflation headwinds persist and natural catastrophes are elevated.
The Australian general insurer reported a profit of 468 million Australian dollars (US$323.4 million) for the six months through December, compared to A$173 million a year earlier.
IAG, which largely pre-announced its results earlier in February, declared an interim dividend of A$0.06 cents a share, in line with a year earlier.
Consensus forecasts compiled by FactSet had pointed to an interim dividend of A$0.10 per share.
“Despite the challenges from the high inflation and perils experience impacting our business in the half, I believe we have a sound basis for confidence as we move into the second half,” said Chief Executive Nick Hawkins.
IAG reported gross written premium of A$6.57 billion in its first half, up 7.5% from a year earlier. It said this was driven by rate increases to offset high inflation in supply chains, as well as customer number growth in its home and motor portfolios.
Australian general insurers, including rival Suncorp Group Ltd., have been managing the fallout from three consecutive La Niñas. While the likely end of the weather pattern may provide a reprieve, insurers have also been pressured by higher reinsurance costs. This has helped to spur higher pricing for cover, with insurers also adjusting their appetite for certain risks.
IAG reaffirmed its fiscal 2023 guidance for the reported insurance margin to be around 10%, prompted partly by the combination of the increase in the expectation for natural perils, the anticipated inflationary impact on claims following the Auckland event and the overall macro environment.
For fiscal 2023, IAG also reaffirmed its gross written premium growth to be around 10%.
IAG had updated its guidance on Feb. 3.
Write to Alice Uribe at [email protected]
