Australia’s largest general insurer hit by COVID-19 losses

By Ranamita Chakraborty

Ongoing uncertainty from the impact of COVID-19-related challenges surrounding economic conditions and the direction of investment markets has cast doubt on IAG’s business and financial performance in the concluding months of FY2020 which ends on 30 June.

The insurer’s underlying business performance has remained strong for the nine months ended 31 March 2020.

However, the current crisis has led to the general insurer advising shareholders that it has a ‘limited scope’ to pay a final dividend in September 2020.

This is after application of the upper end of IAG’s 60-80% of full year cash earnings pay-out policy and after allowance for the A$0.10 ($0.06) interim dividend paid in March.

In August, the IAG board will determine the quantum of any final dividend in line with its normal timetable after considering the company’s FY20 financial performance which will be finalised at that time.

At the end of April, the insurer’s investment income on shareholders’ funds amounted to a financial year-to-date loss of approximately A$280m pre-tax – reflecting the severe corrections witnessed in the second half of the financial year in equity and credit markets.

In view of the COVID-19 impact, IAG has retained its existing FY20 market guidance of ‘low single digit’ gross written premium growth and a reported insurance margin of 12.5-14.5%.

Asia Insurance Review

Leave a Comment

Your email address will not be published. Required fields are marked *