IAG 1H25 Results

"Today's result was delivered in a period of favourable weather and benefited from a $200m release from the COVID Business Interruption provision. Our results reflect the volatility of our sector and the fact we're often subject to factors outside our control - the good years help us weather the bad and be well positioned to pay future customer claims.

We continue to focus on customers as we help keep communities safe and support those experiencing cost of living pressures. Recent storms, floods and the LA fires are a stark reminder of the need to be a well-prepared nation."

IAG Managing Director and CEO Nick Hawkins

Results overview

IAG today announced its first half results for financial year 2025, reporting a net profit after tax of $778m, up 91% (1H24: $407m).

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.

The IAG Board declared an interim dividend of 12cps.

Commenting on the company's performance, IAG Managing Director and CEO Nick Hawkins said:

"We finished 1H25 with strong momentum as we focus on supporting our customers and communities in Australia and New Zealand.

"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.

"It 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.

"Across our businesses in Australia and New Zealand we continue to improve customer experiences while focusing on underwriting discipline and driving efficiency.

"We've significantly improved our claims management capability to ensure we are there for our customers when they need us most. We are now at our lowest level of unresolved claims since the 2022 floods.

"High customer satisfaction and renewal levels in our retail business reflect the confidence people have in our brands, and the quality of service we deliver.

"In Australia, our strategic alliance with RACQ, once complete3, will further increase the reach of our retail insurance products through some of the most trusted brands in financial services."

Mr Hawkins said the company is working to minimise the impact of premium increases on customers, particularly those facing financial hardship due to the cost-of-living crisis.

"In the past six months, we have provided financial support to more than 10,000 customers across Australia and New Zealand who are experiencing financial difficulties. We understand the pressures many of our customers are under and are offering tailored assistance.

"Inflation is beginning to ease, which is a positive sign, contributing to a moderation in premium increases across our portfolios. Our investment in our multi-year natural perils protection will help reduce volatility from extreme weather events and further stabilise costs for our customers," he said.

Mr Hawkins said the company's investment in operational initiatives has delivered promising results.

"We have migrated more than three million insurance policies to our Retail Enterprise Platform and adding 300,000 policies each month, delivering significant improvements in customer experience and enabling us to efficiently price and manage risk.

"The Enterprise Platform allows us to execute at scale and will support our future growth across the Group."

Building resilience

Mr Hawkins said recent severe weather events were a stark reminder that customers, communities and nations need to be prepared and resilient in the face of extreme weather.

"The LA wildfires and recent floods in Far North Queensland underscore how critical it is for governments, insurers and communities to work together.

"New IAG research4 shows the LA fires have heightened awareness and concern across Australia and New Zealand around preparing for and responding to natural disasters.

"Our research shows nearly half (48%) are now more concerned about their safety and protection needs and 86% are more inclined to take action. And 46% are more likely to seek information on the actions they can take to prepare for and respond to a bushfire.

"It's up to us as insurers to help educate our customers on their risks, provide the information they need, lift awareness of discounts available and work with government on upfront mitigation for communities at risk," Mr Hawkins said.

"We have invested significantly in education and engagement programs to encourage resilience and preparedness. This includes EmergencyRedi workshops in partnership with Australian Red Cross and our AgCarE partnership which aims to help strengthen rural communities."

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 7.2 million 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.