By Ryan Hewlett

Feb 13 - (The Insurer) Insurance Australia Group $(IAG)$ on Thursday reported a 91 percent jump in profit after tax for the first half of its fiscal year, driven largely by the release of pandemic-related business interruption (BI) reserves and lower-than-anticipated weather losses.

• Net profit after tax jumps 91% to A$778mn

• Includes A$140mn post-tax BI provision release

• GWP up 6% to A$8.4bn; NEP up 9.7% to A$4.49bn

• Interim dividend up 20% to 12 cents per share

Net profit after tax rose to A$778mn ($488.7mn) in H1, almost double the A$407mn reported in the same period last year.

This increase was mainly driven by a A$140mn post-tax release of Covid-19 BI reserves, an increase in net earned premiums and an improvement in its insurance profit.

Pre-tax insurance profit rose 56 percent to A$957mn, with the increase attributable to lower-than-expected natural perils costs. IAG said natural catastrophe losses in H1 were A$215mn below its allowance for the period.

This equated to a reported insurance margin of 19.0 percent and an underlying insurance margin of 15.1 percent, up 140 basis points year on year.

Gross written premium rose 6 percent to A$8.4bn, with growth driven primarily by the carrier’s Retail Insurance Australia and Intermediated Insurance Australia segments, which grew 6.1 percent and 10.1 percent, respectively.

IAG’s New Zealand operations grew GWP by 1.2 percent to A$1.89bn in the first half of its fiscal year. In local currency terms, underlying growth was 4.7 percent.

Group net earned premium rose 9.7 percent year on year to A$4.93bn, up from the A$4.49bn reported in the prior-year period.

Commenting on the results, IAG managing director and CEO Nick Hawkins said: “Today’s result was delivered in a period of favourable weather and benefited from a A$200m release from the Covid Business Interruption provision. Our results reflect the volatility of our sector and the fact we’re often subject to factors outside our control – the good years help us weather the bad and be well positioned to pay future customer claims.

“We continue to focus on customers as we help keep communities safe and support those experiencing cost of living pressures. Recent storms, floods and the LA fires are a stark reminder of the need to be a well-prepared nation.”

Hawkins – who took the helm of the Australian insurer in November 2022 – also expressed his confidence that IAG will achieve its guidance for the 2025 financial year.

This includes reported insurance profit guidance of A$1.4bn to A$1.6bn, which assumes full-year natural peril costs of A$1.28bn with H2 2025 costs of A$857mn.