IAG posts reduced first half profit
Insurer IAG has posted a first half net profit after tax of $4 million for 2009, down by 94 percent ($110 million) on the previous corresponding period.
The insurer said the profit was “significantly impacted” by an investment loss on shareholders’ funds of $72 million, compared to a profit of $76 million in the 2008 first half, reflecting weak markets.
It was also impacted by a $115 million loss on the sale of non-core mass market operations in the UK, closure of the Lloyd’s syndicate Alba and associated underwriter Diagaonla, as well as the restructure of the business in Asia.
The group posted an insurance profit of $227 million for the 2009 interim period, up from $190 million in the first half of 2008.
This was driven largely by a 8.8 per cent rise in gross written premiums in its largest business, Australia Direct, which includes NMRA Insurance, SCIO and SGIC.
IAG managing director and chief executive Michael Wilkins said IAG expects to “continue to improve its second half 2009 underlying performance”.
This would be driven by the “earning effect of premium rises and portfolio changes, such as the exit from the poorly performing mass market operations in the UK”.
He said the group also expects to fully realise the targeted $130 million per annum of pre-tax cost savings in its Australian operations during the second half of 2009.
It declared a fully franked interim dividend of 4 cents per ordinary share, payable on April 8.
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