Insurance Australia Group Limited (IAG) Managing Director and CEO, Mike Wilkins has advised the Group’s shareholders that, after the completion of the first quarter of its fiscal year, IAG was on track to meet its full year guidance of an insurance margin of 10.5 percent−12.5 percent and underlying gross written premium growth of 3 percent−5 percent for the 2011 financial year.
Wilkins addressed the group’s annual general meeting. He noted that “in the opening months of the 2011 financial year, our businesses in our home territories of Australia and New Zealand continued to perform well.
“This performance has been achieved despite the challenges of responding to a number of significant natural perils,” Wilkins continued. “In Australia last month, widespread storms affected South East Australia, and our businesses have managed around 6,500 related claims. In New Zealand, our people have been working around the clock responding to more than 7,000 claims following the powerful earthquake which struck Christchurch last month, as well as a severe snowstorm. I am extremely proud of the assistance and consideration shown by our people to affected customers during these difficult times.”
He added that “from a financial perspective, the claim cost for the Group from these events will be covered by reinsurance, once again demonstrating the importance of having a robust reinsurance program to manage the financial volatility of these types of events.
“In the UK, under the new leadership of CEO Ian Foy we have made progress with the program of remedial actions to help restore profitability to our business there, and we are pleased with the progress made in our Asia division.”
IAG Chairman Brian Schwartz stressed that the Group would continue to take the necessary actions to insure that shareholder value improves. He noted that the Group’s “Board is confident that by remaining focused on the core priorities of the refined strategy set two years ago, the Group’s performance will improve in the current year, as evidenced by the guidance we have reaffirmed today. Shareholders can be assured that the Board believes this improvement will translate into greater future profit and dividends for shareholders.” He added that the Board intends to appoint a new Director this calendar year.
IAG said the guidance announcement assumes “losses from natural perils are in line with budgeted allowances of A$435 million [US$424 million], and no material movement in foreign exchange rates or investment markets.
Source: Insurance Australia Group
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