New Zealand
IAG is the largest general insurer in New Zealand, trading under the State, NZI, AMI and Lumley Insurance brands.
New Zealand’s local currency gross written premium grew by 8.9% to NZ$2,696 million, reflecting the combination of:
- continued premium growth in the Consumer Division, led by higher volumes and increased rates in the private motor vehicle portfolio; and
- strong premium growth in the Business Division, following rate increases in both commercial and personal lines, partially offset by lower new business volumes as the business maintained its underwriting disciplines.
Reported New Zealand gross written premium growth was 6.3%, after an adverse foreign exchange translation effect, particularly in the first half of the year.
The Consumer Division demonstrated its dedication to IAG’s purpose through corporate partnership with the New Zealand Red Cross to build community resilience and preparedness.
The Business Division’s strong market standing was demonstrated at the 2017 New Zealand Insurance Industry Awards held in November 2017. NZI was named Intermediated Insurance Company of the Year and, for the second consecutive year, won the Innovation of the Year award for its Seeing Machines Guardian System, designed for commercial motor vehicles and to help prevent driver fatigue and distraction-related incidents with real-time alerts.
New Zealand achieved a reported insurance margin of 13.8%, up from 7.6% last year, with the improvement reflecting the combination of:
- the initial impact from the 12.5% quota shares which took effect from 1 January 2018;
- higher gross earned premium, driven by good growth in both the Consumer and Business Divisions;
- lower net natural peril claim costs, despite significant peril activity in the second half of the year and an overrun against the full year allowance;
- continued focus on disciplined expense management; and
- some offset from prior period reserve strengthening.
New Zealand’s strong underlying performance was demonstrated by the increase in its underlying margin to 17.6%, up from 14.8% in 2017.
