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Insurance Australia Group Ltd (ASX:IAG) has reported a profit increase for the 2024 fiscal year, driven by growth in net earned premiums, a significant rise in insurance profit, and higher investment income on shareholder funds.
IAG’s net profit after tax (NPAT) reached $898 million, marking a 7.9% increase compared to the previous year. The company also saw an 11% rise in net earned premiums and a substantial 53% increase in investment income on shareholder funds, which totaled $286 million for FY2024.
The standout performance was in IAG’s insurance profit, which soared by 79.1% to $1,438 million, with a reported margin of 15.6%, up from 9.6% in FY2023. A key contributor to this growth was a reduction in natural peril costs, which were $983 million—$115 million below the anticipated allowance of $1,098 million.
For the year, IAG declared a final dividend of 17.0 cents per share (cps), bringing the total dividend for FY2024 to 27 cps, a notable increase from the 15 cps distributed in FY2023.
Managing Director and CEO Nick Hawkins attributed the strong results to growth in gross written premiums, better investment returns, and less severe weather conditions in Australia and New Zealand compared to prior years.
Hawkins also acknowledged the impact of inflation, rising weather volatility, and increasing reinsurance costs on customer premiums. However, he noted that early signs of easing inflation and a new long-term reinsurance agreement announced in June are expected to mitigate the impact of extreme weather events and help stabilize costs for customers in the future.
Recognizing the strain on customers due to premium increases, Hawkins emphasized that IAG has enhanced support for those facing financial hardship by offering tailored solutions through specialized customer care teams.