IAG sees premium-driving trends continuing this year
24 October 2022
IAG says inflation continues to be a feature of the Australian and New Zealand economies and a doubling of natural catastrophe claims last financial year has been followed by further claims from latest flooding across NSW, Victoria and Tasmania.
“We are seeing a continuation of trends evident from last financial year,” CEO Nick Hawkins told the annual general meeting (AGM).
“In response to these pressures, and in anticipation of higher reinsurance costs, we have been increasing our premiums across home, motor and our commercial insurance classes.”
Mr Hawkins says there will be “greater earn-through” from rate changes in the second half as policies are renewed, while high retention rates are the strongest its seen.
The company has received about 2000 claims following the latest flooding, he told Friday’s AGM, which was held as a hybrid event in Sydney and online.
IAG reiterated its forecast for mid-to-high single digit growth in gross written premium (GWP) this fiscal year while reported insurance margin guidance remains for a range of 14-16%.
The company also highlighted its aim for an additional one million new customers and a move to 80% digital transactions by fiscal 2026. It expects its Intermediated Insurance Australia business to achieve $250 million profit by next fiscal year and plans to create $400 million of value through claims and supply chain initiatives.
Mr Hawkins says IAG is continuing its work to build disaster resilience across Australia and New Zealand.
“We know that mitigation, land use planning and building code reform are key to keeping communities safe in natural disasters,” he said.
“We are contributing to better outcomes for our communities by offering our expertise and working with governments, industry and customers to improve planning and build more resilient homes.”