Insurance Australia Group will buy back $350 million worth of shares after delivering an annual profit of $898 million, as higher premiums flowed through.
The 7.9 per cent net earnings boost was driven by an 11 per cent rise in premiums, a 35 per cent rise in investment income on shareholder funds and a 79.1 per cent jump in insurance profit after IAG paid out fewer natural perils claims.
The natural perils cost of $983 million in 2023/24 was $115 million below IAG’s allowance.
“Today’s result reflects the strength of the IAG business as well as the operational improvements we have implemented,” CEO Nick Hawkins said on Wednesday.
IAG will pay a half-franked final dividend of 17 cents per share, up from nine cents a year ago.
The full-year payout is 27 cents per share, up from 15 cents in 2022/23.
IAG also said it would spend $350 million buying back shares, given that its capital position as of June 30 was well above target.
During the year, IAG increased its claims workforce by 150 to deal with major claims events and began using generative artificial intelligence and technology to cut claim processing times.
Numerous victims of major flooding across eastern Australia and Tasmania in 2022 have said insurance companies were slow to pay their claims.
A federal parliamentary committee will release a report on the issue by October.