February 11, 2020 / 10:03 PM / 7 days ago

UPDATE 1-IAG first-half profit falls 43%, cuts FY insurance margin outlook

(Adds outlook, background)

Feb 12 (Reuters) - Insurance Australia Group posted a drop of more than 43% in first-half profit on Wednesday and cut its full-year insurance margin for the second time in three weeks, hurt by rising claims from bushfires and hailstorms across the country.

Net profit fell to A$283 million ($189.98 million) in the six months ended Dec. 31 from A$500 million a year earlier, where it booked a one-off gain of A$208 million from selling its Thailand business.

The general insurer cut its insurance margin, a key profitability metric, to a range of 12.5% to 14.5% from a range of 14.5% to 16.5%, citing the impact from the “catastrophic weather events”.

For the first-half, the Sydney-based firm’s insurance margin was 13.5%.

Australian insurance companies have faced a turbulent summer as raging wildfires, drought and hailstorms led to a surge in claims that weighed on margins.

The company declared an interim dividend of 10 cents per share.

AIG’s rival Suncorp Group Ltd on Tuesday posted a 6% dip in first-half underlying profit, hurt by weaker performance of its insurance business owing to higher natural hazard costs.

$1 = 1.4896 Australian dollars Reporting by Arpit Nayak and Aby Jose Koilparambil in Bengaluru; Editing by Anil D'Silva

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