Insurance Australia Group Triples Fy Profit

Insurance Australia Group Ltd (ASX:IAG) has nearly tripled its full year profit to A$250 million (US$261.27 million) and the owner of NRMA and CGU expects insurance margin growth in the year ahead.

The net profit for the 12 months to June 30 was up from $91 million in the previous corresponding period, Sydney-based IAG said in a statement on Thursday.

Revenue from ordinary activities increased by 30.05 per cent from the previous year to $12.25 billion.

IAG declared a fully franked final dividend of seven cents per share, up from 4.5 cents a year earlier.

Insurance profit for the year to June was $660 million, up from $493 million in the prior year.

Insurance margin was 9.1 per cent, an improvement from seven per cent in the previous corresponding period.

Gross written premium of $81. billion was up from $7.8 billion in the previous year.

Chief executive Mike Wilkins has forecast gross written premium growth of between six and nine per cent in the current financial year, and an insurance margin of 10 to 12 per cent.

"Our focus is on accelerating profitable growth in Australia and New Zealand and building our presence in Asia," he said.

"In the UK, our priority is to return the business to profitability."

In the year to June, IAG incurred claim costs from natural disasters of $610 million, $175 million more than it had allowed for at the beginning of the year.

It also spent $83 million on topping up its reinsurance over the year, taking its full year re-insurance cost to $620 million, up from $556 million in the prior year.

Those costs were partially offset by a reserve release of $328 million in the year to June, up from $228 million in the previous year.

Insurance profits from IAG's Australian and New Zealand businesses rose from the previous year, but the loss from its UK operations was larger than the previous year.

The UK loss was $355 million, down from $65.5 million the previous corresponding period.

"While the result of our UK business was disappointing, we remain confident that accelerated management actions, including substantially increasing rates and exiting poorly performing business, will move the business towards breakeven in the 2012 financial year," Mr Wilkins said.