IAG yesterday announced its first half results for financial year 2025, reporting a net profit after tax of AUD778m ($488m), up 91% from $407m in 1H24.
This increase was mainly driven by the $140m post-tax release of the COVID Business Interruption provision, an increase in net earned premiums, and an improvement in the insurance profit.
The pre-tax insurance profit of $957m was up 56% (1H24: $614m) and equated to a reported margin of 19.4% (1H24: 13.7%). The company’s natural perils costs were $215m below allowance for the half and had a significantly positive impact on the insurance profit.
“We finished 1H25 with strong momentum as we focus on supporting our customers and communities in Australia and New Zealand,” IAG Managing Director and CEO Nick Hawkins said. “Today’s result reflects the quality of our business as we continue to see consistent, reliable performance across our portfolios and steady progress against our strategic priorities.”
He continued to say that the result follows a challenging four-year period for IAG, marked by extreme weather events, volatile investment markets, and COVID related issues that impacted our performance.
“Relatively favourable weather conditions during the half, along with strong investment markets and the release of $200m from our COVID Business Interruption provision, have positively impacted the company’s profitability. These more favourable periods allow us to build up reserves to pay future claims when we need to,” he said. “Across our businesses in Australia and New Zealand we continue to improve customer experiences while focusing on underwriting discipline and driving efficiency.”
He added that IAG has significantly improved our claims management capability it is now at its lowest level of unresolved claims since the 2022 floods.
Looking ahead
“We enter the second half of financial year 2025 in a position of strength. With our streamlined structure, investment in technology, and commitment to quality customer service, we have a scalable business ready to grow beyond our current 7.2m direct and partner customers.
“Our innovative reinsurance agreements enhance our resilience and reduce volatility for our customers. As we move into the next phase of growth, I’m confident in IAG’s ability to support our customers, deliver strong returns for shareholders and help build resilience and strength across Australia and New Zealand,” Mr Hawkins said.