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Australia’s IAG cash earnings slump 62% as natural hazard claims surge -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Small toys are seen in front the IAG logo (Insurance Australia Group). This illustration was taken on November 8, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – Insurance Australia Group’s profit and dividend expectations beat on Friday. However, higher claims related to natural disasters such as severe storms or hail in October last year led to a 62% decrease in cash earnings.

This news sent shares of the company up by 4%, to A$4.74, which is their highest level in over two months.

Many insurers have increased their costs forecasts in order to protect natural perils claims.

Suncorp earlier reported that cash earnings in the first half of this year dropped 29%.

IAG (LON), Australia’s leading general insurer, reported that costs related to natural perils claims amounted almost A$299 millions more than its allowance for the time.

For the six-months ended December 31, cash earnings were A$176 millions, compared to A$462million a year earlier. However, A$176 million was declared as a dividend and each share received a 6 Australian cents.

Citi estimated that it would earn cash earnings in excess of A$129million and pay a dividend in the amount of five Australian cents.

($1 = 1.3957 Australian dollars)

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