Insurance Australia Group Limited (IAG) today announced a net...

Insurance Australia Group Limited (IAG) today announced a net loss after-tax of $261
million (FY07: net profit of $552 million) for the year ended 30 June 2008 including nearly
$400 million (after-tax) of restructuring and impairment charges.
This outcome is in line with the guidance provided at IAG's trading update in July. Key features
of the result are:
• A 5.6% increase in gross written premium (GWP) to around $7.8 billion;
• An insurance margin of 6.1% (FY07: 11.4%) and insurance profit of $448 million (FY07:
$767 million), which were adversely impacted by:
o Increased claims costs from natural perils, up 22% to $502 million (FY07: $411
million), well above allowances;
o A $122 million impact from widening credit spreads (FY07: nil); and
o Lower reserve releases, down 16% to $406 million (FY07: $485 million).
• Significantly lower income on shareholders' funds, of $24 million (FY07: $301 million),
reflecting weaker investment markets;
• A $60 million restructuring provision in respect of the devolved operating model being
introduced in Australia and in the corporate office; and
• A non-cash after-tax writedown of approximately $350 million in respect of the UK
assets, following the decision to narrow IAG’s focus in that market.
As previously foreshadowed, the Board has declared a fully franked final dividend of 9 cents
per share payable on 3 October 2008 to shareholders registered on 3 September 2008 (FY07:
final dividend 16 cps). This takes the total dividend to 22.5 cents per share (FY07: 29.5 cps).