Insurance Australia Group Ltd (ASX:IAG) has posted a gain in profit during the 2024 fiscal year, which it said was underpinned by net earned premiums, growth in insurance profit and more impressive investor income on shareholder funds.
IAG’s net profit after tax (NPAT) came in at $898 million – a 7.9% lift from the year before – while net earned premiums were up 11%, and investment income on shareholder funds was up 53% compared to FY2023, at $286 million.
Insurance profit registered significant growth, coming in at $1,438 million – a 79.1% jump from the previous year, with a reported margin of 15.6% (in FY2023, this was 9.6%).
IAG said a key factor in this sector was a lower reading for ‘natural peril costs’: these were $983 million in FY2024, which was $115 million below the allowance for this ($1098 million).
The company’s final year dividend 17.0 cps (cash per share), bringing IAG to a 27 cps for the whole year (up from 15 cps in the 2023 fiscal year).
Managing Director and CEO Nick Hawkins said the main factors underpinning these figures were growth in gross written premiums, stronger investment returns, and less volatile weather in Australia and New Zealand compared to previous years.
“We have previously said inflation, increasing weather volatility, and rising reinsurance costs were major factors affecting customer premiums,” he said.
“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.”
IAG shares have been trading at $7.44.