IAG New Zealand saw its annual profit fall by 80% due to the impact of the severe summer weather.
The New Zealand division of Australian insurer IAG reported a profit of A$44 million (NZ$47.6 million) for the year ended June 30, down from A$220 million a year earlier.
IAG reported that there were three times as many weather-related claims in the 2023 financial year compared to the year prior, with 50,000 claims for the Auckland anniversary weekend floods and Cyclone Gabrielle.
As of August 21, about 57% of the 50,000 claims were resolved from the weather events, including 90% of personal motor claims and 63% of content claims. Most of the rest of the claims are set to be resolved by the end of the year, the company said.
NZ natural perils took their toll on the insurer’s bottom line in the 2023 financial year. Heavy rain on the East Coast in July 2022 came to A$57m, the Auckland rain and floods reached A$216m, and Cyclone Gabrielle came to A$68m.
The insurer’s NZ division, which owns the State, AMI and NZI brands, saw its gross written premium grow by about 12% to $3.6 billion over the year, a larger increase than the prior year. The GWP increase was largely driven by premium rate increases.
IAG New Zealand chief executive Amanda Whiting said the 2023 financial year was “challenging” for many New Zealanders, with the Auckland anniversary weekend floods and Cyclone Gabrielle the second and third largest loss events ever in NZ.
The severe weather also “significantly impacted” IAG New Zealand’s insurance margin, which fell from 16.8% in 2022 to 13.5% in the 12 months to June 30.
The lower margin reflected higher claims and reinsurance costs and a “lag” in the earn-through of premium increases, IAG said.
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