IAG wary of COVID claims after H1 loss | Ralph-Lauren

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Insurance Australia Group says it is trying to clarify how business interruption claims can be made from COVID-19, after a first-half loss of $460 million due to the pandemic.

IAG, which has brands including CGU, NRMA and SGIO, reported the loss on Wednesday having in November put aside $1.15 billion for possible business claims from coronavirus.

The NSW Court of Appeal in November ruled insurers could not deny coronavirus-related claims.

The company said its business interruption policies were never intended to cover pandemics, and the industry was trying to clarify how these policies could be interpreted in the COVID era.

Chief executive Nick Hawkins preferred to discuss a 3.8 per cent improvement in gross written premium to $6.17 billion.

“We believe that’s a strong result given the economic uncertainty we’ve been running our businesses in,” he said.

Gross written premium is the total revenue from premiums an insurer expects to receive from that period.

Mr Hawkins said growth came from rate increases in commercial and home insurance in Australia and across all categories in New Zealand.

He said trading conditions during the six months were not as bad as feared.

The unemployment rate fell, and there were strong sales of used cars.

The cost of claims from weather impacts was less than IAG forecast.

The company will pay an interim dividend of seven cents per share, unfranked. This is lower than the previous interim dividend of 10 cents per share, 70 per cent franked.

Shares were higher by 4.64 per cent to $5.29 at 1149 AEDT on Wednesday.

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