IAG New Zealand Announces FY23 Results
IAG New Zealand had a solid FY23, reflecting the positive momentum in its underlying business and the strong progress made in responding to New Zealand’s largest ever weather events.
New Zealand’s largest general insurer has today announced local currency GWP growth in FY23 of ~12% to NZ$3,587 million, compared to 7.0% in FY22.
This has been largely driven by rate increases across all key portfolios, strong retention across direct and commercial lines and volume growth in key commercial lines portfolios.
IAG New Zealand experienced a higher underlying loss ratio than in FY22 of 56.6% (reported loss ratio of 75.3%). This was influenced primarily by higher average claims costs, which were driven by the higher inflationary environment, the appreciation of assets, and supply chain constraints. The reported loss ratio was significantly influenced by the major weather events of early 2023.
IAG New Zealand’s insurance profit was A$44 million in FY23, compared to A$220 million in FY22.
The underlying margin was 13.5% (reported margin of 2.4%). This was impacted by the higher underlying claims and reinsurance costs, and lag in the earn through of premium increases.
IAG New Zealand CEO, Amanda Whiting says, “It’s been a challenging year for many New Zealanders – and particularly for those who experienced the devastating impacts of the North Island floods and Cyclone Gabrielle. These events were the second and third largest loss events to ever hit New Zealand - and all in the space of just three weeks.”
The combined impact of these events has resulted in an unprecedented volume of weather-related claims, sitting at approximately 50,000 from the two events, with claims volumes from weather related events in FY23 being three times higher than in FY22.
As at today’s date, approximately 57% of these claims have been closed, including around 90% of personal motor claims and 63% of content claims.
Amanda Whiting says, “One of the things I’ve been most proud of this year is our ability to support our customers in their time of need.
“Our claims hubs were the first to be established on the ground in affected communities, and with the complexity of the remaining open claims, we will continue our presence on the ground for as long as we are needed.”
Other notable key achievements include:
- New business growth is up across the key commercial lines portfolios and retention rates remain strong with the commercial property portfolio ahead of prior year levels.
- Retention rates in the Direct channel have remained strong, with key personal lines portfolios ahead of prior year. Private motor and home contents new business levels have remained steady, while the homeowner portfolio has experienced a slight reduction.
- NZI has continued to expand its value-added services including its risk advisory services, electrical inspectors’ programme and Fleet Fit programme, enabling commercial customers to proactively manage their risks and reduce the likelihood of making a claim in the first place.
- IAG has also deployed the first stage of its new core technology system. This is the first step in its move to one single enterprise eco-system that will replace multiple systems, reduce complexity, and enable improved customer experience.
- IAG’s vehicle repair network, Repairhub, continued its site expansion in FY23 with two new sites opened. Repairhub continues to deliver a first-class experience with a high net promoter score of +93 and industry-leading repair turnaround times.
- The evolution of digital service offerings continued, enabling customers to connect with IAG via their channel of choice. Digital sales channel share is at 39%.
- Continued investment in the digital claims experience has seen a significant shift in digital claims lodgements to 37%. Customers can now lodge their claim, select their repairer and track their claims progress in an app, which creates a streamlined experience for IAG’s motor vehicle customers.
Amanda Whiting adds, “While facing into the challenges of 2023, we are making excellent progress with our customer-centric strategy. We have a strong focus on organisational simplification to drive efficiencies, including automation and digitalisation initiatives that will only continue to improve the customer experience.”
“We continue to work closely with government and local communities on our climate response.
“Our focus is on the important issue of managed retreat in New Zealand, along with risk-based pricing and leadership on risk mitigation, including the introduction of our three-step plan for flood risk reduction. This will play an extremely important role in helping ensure New Zealanders can continue to access and afford the protection of insurance.”
Other sustainability achievements include the initiatives IAG has in place to support customers experiencing vulnerability, its community partnership with Habitat for Humanity, the workplace diversity initiatives which have been recognised by ANZIIF, the work towards growing the organisation’s cultural competency through its Māori strategy – He Rautaki Māori, and finally, the continued effort to reduce emissions, including the electrification of its vehicle fleet.
Amanda Whiting adds, “Our work in these areas will enable us to continue to run a strong, sustainable business, and this means we can continue to be here for New Zealanders when they need us, well into the future.”