IAG expects to achieve upper-end guidance
Insurance Australia Group Limited (IAG) expects to deliver an insurance margin towards the upper end of its 9–11% guidance for FY10 if the operating conditions experienced in the first quarter continue. Managing director and CEO, Michael Wilkins, said he was pleased with the group’s progress to date.
“In the first quarter, we’ve seen the underlying performance of the business continue to improve and we’ve had the added benefit of narrowing credit spreads,” Mr Wilkins said.
“If the operating conditions experienced to date continue for the remainder of the year we will be on track to report a full year insurance margin approaching the upper end of our 9–11% guidance.”
Mr Wilkins added that the guidance remains subject to the group’s normal caveats around natural perils and investment markets.
“We also expect to achieve our previous guidance of underlying GWP growth in the range of 3–5%,” he said.
”However, reported GWP is likely to be affected by the strength of the Australian dollar.”
IAG’s improved performance has been accredited to higher premiums, the full benefit of operating efficiencies in Australia and ongoing cost control across the group, improved performance from CGU and New Zealand, and reduced exposure to the underperforming UK private motor market.
At the close of trade Thursday, IAG shares were trading at $3.70.
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