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Share Name | Share Symbol | Market | Type |
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Insurance Australia Group Ltd | ASX:IAGCD | Australian Stock Exchange | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
By Robb M. Stewart
MELBOURNE, Australia--Insurance Australia Group Ltd. (IAG.AU), the Australian general insurer that counts Warren Buffett as a shareholder, reported a fall in its first-half profit but softened the blow with plans for a special dividend payout.
Net profit fell 20% to 466 million Australian dollars (US$332.7 million) in the six months through December from A$579 million a year earlier, hit by a significant drop in investment income on shareholders funds due to weaker equity markets, IAG said Wednesday.
Still, the insurer said it would pay a special dividend of A$0.10 a share to reflect its strong capital position, on top of a regular interim payout held steady at A$0.13.
Last June, Mr. Buffett's Berkshire Hathaway Inc. agreed to a strategic partnership with IAG, buying an initial 3.7% stake for A$500 million as part of a 10-year deal that fast-tracked Berkshire's expansion in the region and lower IAG's capital needs. Under the partnership, Berkshire will receive 20% of IAG's gross written premiums and pay 20% of the insurer's claims.
For the half-year, IAG said its insurance profit was 12% lower on last year at A$610 million but its insurance margin expanded to 14.9% from 13.4%.
Gross written premium slipped slightly for the period to A$5.5 billion, 1.1% lower than a year earlier as growth from the insurer's consumer business was offset by challenging market conditions for its commercial operation, with lower average rates and some loss of volume, the company said.
IAG said it continues to expect relatively flat gross written premium growth for the financial year but now anticipates its insurance margin will be at the lower end of earlier 14%-16% guidance.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
February 16, 2016 17:21 ET (22:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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