News: IAG Australia's IAG plans $545 million equity raise after business interruption test case

Nov 20 (Reuters) - Insurance Australia Group (IAG) on Friday sought to raise A$750 million ($545.70 million) in new equity after a state court ruled in favour of policyholders in a test case examining the application of insurance companies' business interruption policies on closures caused by the COVID-19 pandemic.

The insurer said it had decided to take a charge to cover the potential claims impact from the decision which would result in an after-tax hit of about A$805 million on the company's 2021 full-year earnings.

The new capital would help offset a drop of over A$950 million in IAG's regulatory capital caused due to the recognition of the business interruption claims provision, it said in a statement to the stock exchange. ($1 = 1.3744 Australian dollars)