IAG maintains full year guidance

23 Oct 2012, 3:01 pm   -   Source: AAP
Insurance Australia Group (IAG) says it is on track to achieve its full-year financial forecasts. (AAP)

Insurance Australia Group (IAG) says it is on track to achieve its full-year financial forecasts. (AAP)

Insurance Australia Group (IAG) says its performance in the first quarter of the financial year was in line with expectations.

Insurance Australia Group (IAG) says it is on track to achieve its full year financial forecasts after a steady first quarter performance.

"Our performance in the first quarter has built on the momentum evident in FY12," chief executive Mike Wilkins told the IAG annual general meeting on Tuesday.

"We are on track to deliver our full year guidance of an improved insurance margin of 11 to 13 per cent and gross written premium growth of nine to 11 per cent."

IAG's insurance margin, a measure of the profit it makes on premiums, was 10.6 per in 2011/12.

Gross written premium growth was 11.7 per cent.

The company's shares rose on the positive update, gaining four cents to $4.58 by 1457 AEDT.

IAG's acquisition of the AMI business in New Zealand in April and a new operating model in the CGU business were helping to deliver an improved performance, Mr Wilkins said.

The changes at CGU, which sells its products through intermediaries, was introduced to make it easier for brokers to work with CGU.

A review of IAG's ailing UK business continues, Mr Wilkins said, with an outcome still expected before the end of calendar 2012.

The review of IAG's Equity Red Star insurance business, the fifth largest motor insurer in the UK, and commercial insurance broker Barnett & Barnett, began in June.

The UK operations posted a loss of $13 million in 2011/12, and IAG wrote down the value of the operations by $297 million.

IAG's review could result in a sale of all or part of its UK assets, an overhaul of the businesses, or measures to improve their performance in their current form, Mr Wilkins has said previously.

The UK businesses were expected to make a modest profit in 2012/13, Mr Wilkins said on Tuesday.

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