Australian insurer expects further £54m hit in H2 from sold UK operation
Australian insurance group IAG’s first-half results have been hit by a A$182m (£122m) loss from its UK business, which it recently agreed to sell.
It also expects to incur a further A$80m (£54m) loss from the business in the second half of its financial year.
IAG announced the sale of Lloyd’s motor insurer Equity Red Star, which made up the bulk of its UK business, to private equity firm Aquiline in December last year. It announced the sale of its UK broking businesses, Barnett & Barnett and NBJ, shortly afterwards.
IAG expects the sale to be completed in the second half of its financial year, which is the six months to 30 June 2013.
The A$182m loss comprises an insurance loss of A$11m, an operating loss of A$7m from the broking businesses and a A$164m loss on the sale of the operations.
Despite the UK loss, IAG as a group made a net profit after tax of A$461m for its first half of 2013 – the six months to 31 December 2012.
This was more than triple the A$144m it made in the first half of 2012. The main reason for the large improvement was lower natural catastrophe activity. Claims costs for the first half of 2013 were $133m – almost $260m less than IAG paid out in the first half of 2012.
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