Insurance Australia Profit Rises After Thailand Sale

   By Robb M. Stewart 
 

MELBOURNE, Australia--Insurance Australia Group Ltd. (IAG.AU) logged a 17% rise in its annual earnings as gross written premium benefited from higher rates and it profited from the sale of its Thailand operations.

The Australia and New Zealand-focused general insurer, which in 2015 secured Warren Buffett's Berkshire Hathaway Inc. (BRKA) as an investor with a 3.7% stake, flagged a further improvement in its underlying margin for the new year but only further modest growth in gross written premium. It also said it continues to look at options for its remaining investments in Asia, having already exited a number of business in the region.

Net profit grew to 1.08 billion Australian dollars (US$727.4 million) in the 12 months through June from A$923 million the year before, although earnings from continuing operations were 8% lower at A$871 million. The Thailand sale, completed last August, added more than A$200 million to profit.

Gross written premium for the year was 3.1% higher at A$12.01 billion, compared with A$11.65 billion the year before, but the company's insurance profit weakened by 13% to A$1.22 billion from A$1.41 billion.

In the first half of the financial year, Insurance Australia was hit by net disaster claims that were A$110 million above the allowance set for the period. The company has lifted its reinsurance cover for 2019 by A$1 billion to provide protection against natural-disaster losses of up to A$9 billion.

Insurance Australia has been retreating from southeast Asia, and last year agreed to sell its operations in Thailand, Indonesia and Vietnam to bolster capital. In late June, the company said it was in talks to sell some of its 26% interest in India's SBI General Insurance Co.

The company's board will pay a dividend of A$0.20 a share for the second half of its year, for a full-year payout of A$0.32, down by 5.9% on last year.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

August 07, 2019 19:30 ET (23:30 GMT)

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