IAG FY24 net profit growth driven by net premiums increase among other factors

Australian insurer IAG has announced its 2024 full-year results, reporting a net profit after tax of $898 million, up 7.9% on 2023 which saw $832 million in profits.

According to the firm, this increase was driven by an 11% rise in net earned premiums, to $9,244 million, an improvement in the insurance profit, and higher investment income on shareholder funds of $286 million, up 35% on the previous year.

Insurance profit went up 79.1%, to $1,438 million when compared to last year’s. The company’s natural perils costs of $983 million, $115m below the $1098m allowance, positively impacted the insurance profit, IAG noted.

Underwriting profit was $982 million in the year, an improvement compared to the $532 million seen the year prior.

At $16,400 million, gross written premiums (GWP) in 2024 increased 11.3% when compared to 2023. While gross earned premiums went up to $15,425, reinsurance expenses saw a loss of $6,181 million in FY24.

IAG Managing Director and CEO Nick Hawkins said: “Today’s result reflects the strength of the IAG business as well as the operational improvements we have implemented. The trust our customers have in our brands is reflected in continued high customer advocacy and retention in our retail businesses in Australia and New Zealand. We are well positioned to continue supporting our customers and the broader economy.

“The strategic measures we have put in place over the past few years have created a stronger and more resilient IAG. We’ve streamlined our Australian business, established a clear brand strategy and launched NRMA Insurance nationally, outside of Victoria. We have also improved our claims management capability to ensure we are well placed to support our customers when they need us the most.”

He added: “We’ve delivered on our target of at least $250m in insurance profit from our Intermediated Insurance Australia business, and significantly improved our technology platform that delivers the products and services we provide to our retail customers. “New Zealand saw a material uplift in our pricing capability and risk management as we migrated policies to the Enterprise Platform. We strengthened our retail presence, launching AMI Insurance Hubs for in-person customer support, while expanding the AMI RepairHub.”

The company’s results was primarily driven by a combination of growth in GWP, stronger investment returns, and less volatile weather in Australia and New Zealand compared to previous years, Hawkins stated.

However, he noted that the business is focused on minimising the impact of premium increases on its customers.

“We have previously said inflation, increasing weather volatility, and rising reinsurance costs were major factors affecting customer premiums. We are beginning to see some signs of inflation easing, and our long-term reinsurance agreement announced in June is expected to reduce year-on-year volatility from extreme weather events and help stabilise costs for our customers over the longer term.

“We recognise premium increases are affecting customers, and we’ve bolstered our support for those impacted by cost-of-living pressures. Our specialised customer care teams are helping those in financial hardship by finding tailored solutions and providing extra support.

“This year, we’ve also enhanced training for our frontline teams and introduced AI tools to better identify and assist vulnerable customers.”

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