IAG says its full-year profit more than doubled to $832 million as the insurance giant lowered its expense ratio and made more money on its shareholders' funds portfolio.
The NRMA Insurance, SGIO, SGIC, CGU and WFI brand owner reported on Monday that its net profit after tax for the 12 months to June 30 rose 140 per cent from the $347 million it made in 2021/22.
Gross written premium growth was up 10.6 per cent to $14.7 billion, ahead of guidance of around 10 per cent, largely due to premium rises as a result of inflation and higher natural perils costs.
Inflation also drove a significant increase in the size of the motor and homes claims and IAG's natural perils allowance, cutting its underlying insurance margin from 14.6 per cent in 2021/22 to 12.6 per cent in 2022/23.
IAG made an insurance profit of $803 million, up 37 per cent from last year, and reported $212 million in income on shareholders' funds, compared to a $105 million loss the year before.
"FY23 was a solid year for IAG, reflecting the positive momentum in our core business and the significant progress we've made to create a stronger and more resilient company," said IAG managing director and CEO Nick Hawkins.
IAG forecast low double-digit growth in premiums in 2023/24, with an insurance margin of 13.5 to 15.5 per cent for an insurance profit of $1.2 - $1.45 billion.
Mr Hawkins noted that 2022/23 was another year of significant perils, with devastating large-scale events across Australia and New Zealand.
"We are now moving to warmer and dryer conditions, which should see a shift away from rain-dominated claims," he said.
IAG has increased its 2023/24 natural perils allowance by 26 per cent to $1.147 billion.
