Insurance Australia Group Ltd., the Sydney-based insurer formed in 1925, said fiscal-year profit more than doubled as rising income from premiums offset claims from natural disasters in Queensland and New Zealand.
Net income in the 12 months ended June 30 climbed to A$250 million ($262 million) from A$91 million a year earlier, IAG said today in a statement. The company forecast improved profitability and faster premium growth this fiscal year.
IAG and rival Suncorp Group Ltd. are among insurers battered by the worst period of natural disasters on record in Queensland. To broaden its revenue stream from faster-growing economies, IAG this month agreed to buy a 20 percent stake in a Chinese general insurer, Bohai Property Insurance Pty Ltd., for about A$100 million.
“We have been impressed by recent improvements in IAG’s core domestic franchise,” Richard Coles, a Sydney-based analyst at Royal Bank of Scotland Plc, said ahead of today’s report.
IAG shares have fallen 20 percent this year, almost double the 12 percent decline on the benchmark S&P/ASX 200 index.
Gross written premium climbed to A$8.05 billion from A$7.78 billion, while the insurance margin widened to 9.1 percent from 7 percent, IAG said.
“We are confident that the actions we are taking will further improve our performance,” Chief Executive Officer Mike Wilkins said in the statement. “Our focus is on accelerating profitable growth in Australia and New Zealand and building our presence in Asia.”
IAG’s insurance margin will be between 10 percent and 12 percent in the year ending June 2012, and gross written premium will rise between 6 percent and 9 percent, IAG forecast.