Insurance Australia Group Sees FY Profit; Makes Management Changes

July 27, 2010

Insurance Australia Group (IAG) announced that, based on preliminary results, it expects to post an insurance profit of A$493 million (US$445 million) for the full year of 2010, a decrease from the A$515 million (US$465 million) it reported for the 2009 fiscal year.

IAG said it expects to report FY10 net earned premium of A$7.1 billion (US$6.412 billion), compared to the A$7.2 billion (US$6.502 billion) in 2009. The Group expects to report gross written premium of A$7.8 billion, (US$7.044 billion), which it said “equates to underlying GWP growth of 3.8 percent, in line with guidance of 3-5 percent.”

It expects a net profit after tax of A$91 million (US$82 million), compared to A$181 million (US$163 million) in 2009.

IAG Managing Director and CEO, Mike Wilkins, stated that the Fiscal year 2010 result showed a further uplift in the underlying performance of the Group’s Australian and New Zealand businesses during the year. He indicated that “while this year’s financial result does not reflect the expectations we held at the outset of the year, I’m encouraged by the clear and ongoing improvement in the operational performance of our businesses in our home markets of Australia and New Zealand.”

IAG also announced that Ian Foy, currently CEO of IAG’s New Zealand business, will return to the UK to become CEO of IAG’s UK business, succeeding Neil Utley. Jacki Johnson, currently CEO of IAG’s online business, The Buzz, will succeed Foy as CEO of New Zealand, and Group Executive Leona Murphy will take responsibility for The Buzz.

Wilkins explained that Foy’s successful track record in improving the performance of the Group’s New Zealand business, combined with his experience in the UK intermediated motor market, made him the clear choice to lead IAG’s UK operation.

Utley’s departure follows a marked increase in IAG’s claims experience in the UK, notably in the automobile sector. The Group announced in June that it was accordingly strengthening its UK claims reserves [See IJ web site –].

Wilkins noted Foy’s experience, adding that it would be “crucial as he drives the comprehensive remedial action plan we announced last month. Ian has been with IAG for seven years, including two years as CEO of IAG’s New Zealand business and five years running NZI.”

Source: Insurance Australia Group

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