Insurance Australia Group provided Auckland flooding and financial update

Insurance Australia Group Limited (ASX: IAG) advised that it is continuing to support customers affected by the severe storms and flooding in Auckland and the North Island which begun on Friday 27 January 2023. Over 15,000 claims have been lodged across IAG’s AMI, State, NZI and partner brands as at Friday 3 February. According to a preliminary assessment of anticipated claims for the Auckland event shows that the natural perils cost impact, net of reinsurance, will be at the AU$236 million retention level.

Insurance Profit and Net Profit After Tax for the 1HFY23

The company anticipates an insurance margin reported for 1HFY23 of 8.5% compared to 1HFY22 of 7.1%. The 1HFY23 underlying margin is anticipated to be 10.7% compared to 1HFY22 of 15.1% after adjusting for the effects of natural disasters, AU$48 million in prior period reserve strengthening principally due to inflation on short-tail personal claims, and an AU$29 million gain from reducing credit spreads.

FY23 guidance and outlook

The GWP growth is now anticipated by the company to be about 10% in FY23, up from the prior projection of "mid to high single digit". It indicates further premium increases due to inflation, natural calamities, and increased reinsurance expenses.

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