Insurance Australia Group, IAG (ASX:IAG), has flagged flat growth in gross written premiums of around 1 per cent, and its insurance margin will be lower than forecast, ahead of its full-year results.
The company, which owns CGU, NRMA and SGIO, said growth of its gross written premiums of around 1.1 per cent is due to lower compulsory third party pricing and the impact of Covid-19.
Covid has impacted new business, which reduced gross written premiums (GWP) by about $80 million between March and May 2020.
There have been more claims from landlords and travel operators, due to employees transitioning to working from home, with less motor claims during the pandemic.
The insurer's cash earnings are expected to be $279 million and shareholders will not receive a dividend.
IAG chief executive Peter Harmer said the second half of the financial year had been immensely challenging due to the disruption caused by the Covid-19 pandemic. “We have experienced an immensely challenging second half to the 2020 financial year, characterised by severe natural peril activity, the disruption caused by the COVID-19 pandemic to our people, customers and suppliers,” he commented.
Shares in Insurance Australia Group (ASX:IAG) are trading 5.55 per cent lower at $5.45.