Top insurer profit up despite Kaikoura earthquake and motoring claims for IAG NZ

Last November's Kaikoura earthquake was cited in IAG's result.

New Zealand's biggest insurer cited the effects of last year's 7.8 Kaikoura earthquake and more motor vehicle claims as affecting its business here, but internationally it pushed up profit significantly.

Insurance Australia Group (IAG) this morning reported its annual result for the June 30, 2017, year to the Australian Stock Exchange, declaring net profit after tax of A$929 million ($1 billion), up from A$625m last year and insurance profit of A$1.3b, up from last year's A$1.2b.

IAG has operations here, in Australia, Thailand, Vietnam and Indonesia and the result is for the whole group.

The New Zealand margin on insurance fell slightly in the latest period.

"New Zealand's underlying margin of 14.8 per cent was slightly lower than FY16 (16.9 per cent) with increased claim cost pressures notably in motor. A lower reported margin of 7.6 per cent reflected a sequence of significant natural peril events, including the Kaikoura earthquake in November 2016," IAG said.

Three natural disasters were cited in the result.

"Net natural peril claim costs of A$822m, which exceeded allowance by over A$140m and included three significant events: the Kaikoura earthquake in New Zealand, the Northern Sydney hailstorm and Tropical Cyclone Debbie," IAG said.

In New Zealand, IAG is headquartered in the Viaduct area on Fanshawe St and has the State, NZI, AMI and Lumley Insurance brands.

IAG said it expected "further positive rate momentum in commercial classes both in Australia and New Zealand".