Insurance Australia Group FY net profit soars on premium growth
SYDNEY Aug 22 (Reuters) - Insurance Australia Group Ltd just missed expectations with a near quadrupling in full-year net profit, bolstered by strong growth in premiums, but flagged slower growth for the year ahead.
Australia's third-biggest insurer by market value reported a net profit for the year ended June 30 2013 of A$776 million, up from the A$207 million reported the year before and just below the A$796 million expected by three analysts.
The company said it expects to report 5-7 percent growth in gross written premiums in the year to June 2014, or around half the rate achieved last year, driven by its Australian, New Zealand and Asian businesses.
It said insurance margins, a key measure of profitability, may improve, forecasting margins of 12.5-14.5 percent, compared to an underlying margin of 12.5 percent last year.
"Further improvement in the group's performance is expected in FY14. We will continue to focus on our strategic priorities which are delivering demonstrably positive results," Chief Executive Mike Wilkins said in a statement.
Insurance Australia Group sold its struggling UK business in December 2012 and is now focusing on its core markets of Australia and New Zealand and on growing its business in Asia. IAG wants its Asian businesses to contribute 10 percent of gross written premium - or revenue from insurance - by 2016.
Its forecast for 2014 assumes net losses from natural disasters in line with a budget of A$640 million, stable foreign exchange rates and investment markets.
(Reporting by Jackie Range and Sonali Paul; Editing by Richard Pullin)
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