(Reuters) – Insurance Australia Group reported a 26.7% jump in its first-half cash earnings on Monday, boosted by volume growth across its key businesses that helped offset the ongoing impact of higher inflation on claims costs.
The insurance giant said it witnessed its strongest first-half Gross Written Premium (GWP) growth in seven years, up 7.5% to A$7.06 billion, compared to A$6.57 billion last year.
The insurer said GWP growth was driven by rate hikes, to offset the high inflation in the supply chain, as well as customer number growth in the home and motor portfolios.
The company, however, in early February had said that it received more than 15,000 claims as people sought protection for damages caused by flash flooding in New Zealand, while smaller peer Suncorp received about 3,000 claims.
The insurance giant’s natural perils costs ballooned to A$524 million following the severe weather events across multiple states in Australia during the period.
Cash earnings for the six months ended Dec. 31 came in at A$223 million ($154 million), compared with A$176 million in the prior corresponding period and a Refinitiv estimate of A$464 million.
The general insurer retained its goal to achieve a 15% to 17% insurance margin and a reported return on equity of 12% to 13% over the medium term.
Australia’s top general insurer declared an interim dividend of 6 Australian cents per share, the same as in the prior corresponding period.
($1 = 1.4480 Australian dollars)
(This story has been corrected to say A$223 million, not $223 million, in paragraph 6)
(Reporting by Riya Sharma and Archishma Iyer in Bengaluru; Editing by Paul Simao and Diane Craft)