19 Aug 2014

IAG profit up almost two-thirds

1:58 pm on 19 August 2014

Strong investment returns helped the Sydney-based Insurance Australia Group (IAG) lift annual net profit by 59 percent.

IAG is the largest general insurance company operating in New Zealand through the NZI, State and AMI brands.

The Insurance Australia Group (IAG) building in Sydney.

The Insurance Australia Group building in Sydney. Photo: AAP

The company's net profit for the year ended June rose to $A1.23 billion.

It was also helped by the absence of losses from its British business, which it sold in April last year.

The insurance giant says its gross written premiums in New Zealand rose nearly 4 percent in local currency terms.

In Australian dollars, its New Zealand premiums were up more than 17 percent to $NZ1.85 billion, boosted by the strong New Zealand currency.

The company says the higher premiums in New Zealand mainly reflected higher premium prices.

IAG's profit margin in New Zealand rose to 11.5 percent despite the greater-than-expected impact from storms.

The company says it completed the purchase of the Wesfarmers insurance business on 30 June which will help consolidate its market leadership in New Zealand.

IAG is expecting premium growth of 17-20 percent this year, largely reflecting the Wesfarmers purchase.