IAG New Zealand’s annual insurance profit grew 938% in its 2024 financial year, a sign the country’s largest general insurer has recovered from the impact 2023's North Island’s natural hazard disasters had on its finances.
IAG NZ reported its full-year results for the 2024 June-year on Wednesday, revealing an insurance profit of NZ$500.7 million. That's an increase of around NZ$452.5 million from the NZ$48.2 million insurance profit reported in its 2023 annual results.
IAG is the largest general insurer in Australia as well as NZ and reported a group net profit after tax of A$898 million (NZ$984 million) to the Australian Stock Exchange.
IAG NZ Chief Executive Amanda Whiting said the NZ insurance profit had been driven by fewer devastating weather events as well as growth in Gross Written Premiums (GWP) and stronger returns on investments.
“This year’s result reflects the absence of any major natural disaster or significant weather events. It is important to maintain the strength of our business, so we can secure the capital we need to support and protect New Zealanders,” she said.
Whiting added that insurers needed to take a multi-year view of their financial performance given NZ’s susceptibility to natural hazards and their volatility.
“Within the insurance cycle, we need to balance out the bad years with the good.”
Gross Written Premium (GWP) for IAG NZ jumped 15% to NZ$4.12 billion in the 12 months to June 2024. This is up from 2023, when annual GWP grew by 12% to NZ$3.58 billion. Premiums rose 7% in the 2022 financial year.
Whiting said IAG NZ understood the impact premium increases have had on some of its customers, and the company had “bolstered” its support for anyone experiencing cost-of-living pressures.
“With inflation now beginning to ease, and our long-term reinsurance arrangements announced in June, we expect premium increases to stabilise,” she said.
The IAG group announced in July it had entered into a comprehensive five-year natural perils reinsurance agreement with Berkshire Hathaway Inc and Canada Life Reinsurance subsidiary National Indemnity Company.
This agreement will provide up to A$680 million (NZ$744.9 million) of additional protection across the group annually, and up to A$2.8 billion (NZ$3 billion) over the entire five-year period.
With a combination of reinsurance protections and quota share agreements, the IAG group has set out a natural hazard allowance of A$1.28 billion (NZ$1.4 billion) in the 2025 financial year, which is 17% higher than a year earlier.
IAG NZ’s insurance margin for the 2024 financial year jumped to 22.5%, up from 2.4% in the 2023 financial year. IAG said the increase reflected a higher underlying margin of 16.9% (up from 13.5% in 2023) as well as “significantly lower” natural perils.
The NZ insurer said it insured over NZ$1 trillion of the country’s assets during the 2024 financial year and has continued to protect one in two NZ households. It received 552,000 claims and paid out NZ$2.8 billion in claims in the 2024 period.
Whiting said as of June 30, IAG NZ had closed approximately 97% of more than 50,000 claims received from Cyclone Gabrielle and the North Island floods last year.
This includes 98% of home claims, 99% of contents claims and 99% of motor claims.
Whiting described the Government’s focus on climate adaptation – all parties in Parliament voted for a select committee inquiry into climate adaptation back in May – as a “great start”.
But she said further action was needed and IAG NZ was committed to “playing our part”.
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