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Daily Insurance Industry News
Saturday 21st of October 2017
August 26, 2008

IAG posts large 2008 loss

by David Masters

Story link: IAG posts large 2008 loss

Insurance Australian Group (IAG) has post a net loss after tax of A$261 million (£121 million) for the financial year ending June 2008.

Insurance profit for the Australia-based company was A$448 million, down from A$767 million last year.

The fall in profit occurred despite an increase in gross written premiums to A$7.8 billion.

Shareholders were paid a final dividend of 9 cents per share, 7 cents less than last year.

The loss is being blamed on a higher than usual frequency of natural disasters, and on the underperformance of the company’s UK business.

Claims for natural disasters increased 22% to A$502 million.

Lower reserve releases, down 16% to A$406 million, also contributed to the poor results.

IAG is in the process of selling parts of its UK business, including motor insurance company Hastings, and underwriting Agency Advantage. This year the company had to write down around $350 million of its UK assets.

Newly appointed CEO, Michael Wilkins, said he was ‘disappointed’ by the ‘poor result’, but added he is confident that his new strategy will immediately improve the company’s performance.

Wilkins believes that ‘discipline and focus’, as well as his plans to make cost savings of A$130 million, will transform the flagging company.

 

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