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IAG releases expectation for the Group’s full year result

  • by The Quotesonline Team

Insurance Australia Group’s Managing Director and CEO Mike Wilkins has announced the Group expects to deliver a full year insurance margin in the range of 9%–11%, compared to its expectations held at the outset of the year of 10.5%–12.5%.

This guidance encompasses:
• Ongoing strong underlying performance from the Australian and New Zealand businesses, offset by a further second half operating loss from the UK, albeit at a lower level than that of the first half;

• Full year natural peril claim costs of $500 million, which exceeds the Group’s full year budgeted allowance of $435 million;

• A charge of approximately $40 million for the new UK reinsurance arrangement, in respect of the underwriting year ended 31 December 2010;

• Full year net reserve releases not exceeding FY10’s $228 million (excluding the UK strengthening in 2H10); and

• No material movement in foreign exchange rates or investment markets in 2H11.
The Group’s full year guidance for underlying gross written premium growth remains unchanged at 3%−5%.

“The ongoing strength of our businesses in Australia and New Zealand gives us confidence the Group will deliver an insurance margin in the 2011 financial year of 9%–11%, compared to 7% reported in 2010. We expect this improvement to be achieved despite higher anticipated natural peril claim costs and a delay in the
restoration of our UK operation to profitability,” Mr Wilkins said.

IAG will announce its half year result on 24 February 2011 and plans to provide a more in-depth update on each of its businesses and longer term strategy on 14 June 2011.

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