3 Min Read
(Recasts, adds CEO quote, background details)
SYDNEY, Feb 22 (Reuters) - Insurance Australia Group , the nation's largest general insurer by market share, on Wednesday raised its full-year gross written premium growth guidance after posting a 4.3 percent fall in first-half net profit that topped market expectations.
IAG, which specialises in motor and property insurance, said net profit fell to A$446 million ($342 million) in the six months ended Dec. 31 compared with A$466 million a year ago but beat the A$419 million estimate of three analysts polled by Thomson Reuters I/B/E/S.
The company said strong equity markets increased investment income and gross written premium growth of 4.7 percent was higher than expected due to rate increases.
IAG said gross written premiums were expected to rise at low single-digit levels for the full-year, up from its prior guidance of relatively flat growth.
"This is a sound result for our core businesses in Australia and New Zealand," IAG Chief Executive Peter Harmer said.
IAG, which has a strategic partnership with U.S. investor Warren Buffett's Berkshire Hathaway Inc, reported an insurance margin of 12.6 percent for the half-year, near the bottom of its target range of 12.5 to 14.5 percent. IAG on Wednesday said full-year margins were expected to fall in the middle of the range.
Moody's on Feb. 16 said there were emerging signs that premium rates had started to slowly rise across the Australian insurance industry, particularly in motor insurance and to a lesser extent in home insurance.
The insurance sector has become a hotbed of corporate activity in the region.
Suncorp Group on Wednesday said it had bought 11.1 percent of New Zealand general insurer Tower Ltd and submitted a non-binding takeover offer to the company's board that would top a NZ$197 million ($141.1 million) bid from Canada's Fairfax Financial Holdings Ltd on Feb. 9.
Allianz SE has considered a potential bid for Australia's QBE Insurance Group, which has a market value of A$17 billion, according to sources familiar with the situation. ($1 = 1.3024 Australian dollars) (Reporting by Jamie Freed; Editing by Robin Pomeroy and Hugh Lawson)