IAG reported a net profit of AU$347 million for FY22.
The insurer had reported a net loss of AU$427 million in the FY21.
IAG posted a profit despite a 2.9% fall in revenue.
Insurance Australia Group Ltd (ASX:IAG) on Friday announced its return to profit in the financial year 2022 from a net loss in the year-ago period, buoyed by strong gross written premium (GWP) growth despite challenging circumstances.
IAG reported a net profit of AU$347 million for the full year against a net loss of AU$427 million in the FY21, IAG said in its latest ASX filing. In the financial year 2020, IAG had reported a profit of AU$435 million.
The multinational insurance firm posted profit for the period under review despite a 2.9% fall in revenue. The company’s revenue hit AU$18.3 billion for the year, having declined from AU$18.9 billion recorded in the financial year 2021.
IAG’s gross written premiums grew 5.7% to AU$13.3 billion in FY22. The growth was consistent with the upgraded guidance of mid-single digit growth with some volume growth.
On the other hand, underlying insurance margin was almost flat at 14.6%, compared to 14.7% in previous fiscal. Group operating costs stood at AU$2.53 billion, broadly in line with previous guidance, resulting in an improved expense ratio.
“Our FY22 financial results reflect the quality of our underlying business as we build a stronger and more resilient IAG. We had strong GWP growth, and the performance of our business was steady despite the challenging external environment,” IAG's Managing Director and CEO Nick Hawkins said.
“While the [GWP] growth predominantly reflected rate increases to offset inflationary pressures in the supply chain and natural perils, retention rates improved over the year,” he added.
IAG expects business performance to remain robust in FY23. IAG is forecasting mid-to-high single digit GWP growth and a reported insurance margin of 14% to 16%.
“Our FY23 guidance aligns to our aspirational goals to achieve a 15% to 17% insurance margin and a reported ROE of 12 to 13% over the medium term. These goals encompass our ambitions around increasing our customer base by 1 million to 9.5 million by FY26, an insurance profit of at least $250 million by FY24 in our Intermediated Australia business,” the company added.
Shares of IAG have risen over 3% on a year-to-date (YTD) basis. In the past 12 months, the share price has fallen over 15%. The shares have risen over 4% in the past month. By 10:35 AM (AEST), the shares were trading 0.87% higher at AU$4.65.
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