UK hit by bodily injury claims costs despite growth
Insurance Australia Group (IAG) has said upped expectations claiming it expects to achieve a full year insurance margin in the range of 11.5% - 13.0%, up from previous guidance of 9% - 11%.
IAG expects to report a half-year insurance profit of $488m ($227m), representing an improved insurance margin of 13.4% (6.2%).
It cited:
- Better underlying operating performance
- Natural peril claims of $121m ($176m) compared to expected $166m
- Reserve releases of $80m ($85m)
- Credit spreads gain of $28m (- $86m)
- Reduced insurance margin by around 3%
- Gross written premium (GWP) growth of 5% (down 1.5% due to currency)
IAG managing director and CEO, Michael Wilkins, said: “Our overall performance in the first half is a significant improvement on the previous corresponding period, with more than half of the expansion in our insurance margin derived from operational improvements.
UK bodily injury claims
“In the UK, Equity Red Star has grown GWP in local currency on the back of rate and volume increases in specialist classes, but its insurance margin has been affected by a deterioration in bodily injury motor claims for the 2007 and prior underwriting years. This is in line with recent UK industry experience.
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