IAG, the owner of State, NZI, and AMI, recorded a drop in New Zealand profit in the year to June as claims volumes increased.
The New Zealand business remained highly profitable, however, with strong customer retention and premium increases boosting revenue.
The firm made a A$305 million profit over the past year in New Zealand, slightly down from A$330 million the year before.
The insurance giant, listed on the ASX, reported an overall group loss of A$427 million, amid a higher number of Covid-related business interruption claims, refunds to Australian customers, and payroll issues.
The loss was a sharp decline on the A$435 million profit recorded the year before.
IAG avoided a large increase in weather claims in New Zealand. Aussie events took more of a toll on the business, with the Queensland and New South Wales floods leading to claims worth more than A$135 million.
Chief executive Nick Hawkins noted a trend towards risk-based pricing on home policies, with those living in natural disaster-prone areas more likely to pay higher premiums than those in lower risk zones.
IAG called the performance of its New Zealand business “sound”, and said it would work to monitor the impact of climate change on the insurance market.
