IAG posts 1H profit fall, declares $200m share buyback
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The news: Insurance Australia Group (IAG) reported a slide in net profit for the six months to December 2023, and declared an on-market share buyback of up to $200 million.
The numbers: IAG's net profit fell 13% year-on-year to $407 million. However, the group saw insurance profit climb over 75% to $614 million compared to the prior corresponding period, with gross written premiums (GWP) up 12.5% to $7.6 billion. The insurer also reported an insurance margin increase of 13.7% compared to 1H23, and reaffirmed its full-year financial guidance.
IAG said it would undertake an on-market share buyback of up to $200 million on the back of its "strong capital position", and declared an interim dividend of 10 cents per share, up from 6 cents per share a year ago.
The context: Last month the Sydney-based insurance group successfully placed its catastrophe reinsurance program for the 2024 calendar year, in signs the global reinsurance sector is stabilising after years of hard market conditions.
IAG said that its six-month GWP growth was its strongest in nine years on the back of increased frequency and severity of natural perils, inflation and increased reinsurance costs.
While the company expects GWP to climb in the low double digits in 2024, it said it is "working hard to minimise premium increases and continue to work with government, businesses, and communities to improve community resilience and reduce risk".
The source: ASX announcement
