IAG’s intermediated division has stemmed its losses, posting an insurance profit of $209 million for the year to June 30 after racking up a $103 million deficit in the prior 12-month period. 

Group CEO Nick Hawkins says the results show the work to improve Intermediated Insurance Australia (IIA) is paying off and the division remains on track to achieve a $250 million profit in this financial year. 

“In terms of building out better businesses, we are seeing material improvements coming through in our intermediated insurance business here in Australia,” Mr Hawkins said in an earnings call on Monday. 

“For too long the CGU WFI business here in Australia has underperformed and it's been a drag as we know on our overall group financial returns. 

“We've set it up as a separate division. We have an experienced leadership team in place focused on turning that business around and it's moved from loss making in [FY] 21 and [FY] 22 to deliver in excess of a $200 million profit this year.” 

He says the IIA business is “demonstrating progress towards the target that we set of delivering at least a $250 million insurance profit” for the 2023/24 year.  

IIA Group Executive Jarrod Hill and his team have focused on pricing underwriting discipline as part of efforts to turn around the business. 

Mr Hawkins says the focus led IIA to achieve underlying insurance margin growth of 9.8% in the second half, improving on the 5.7% growth earned in the prior half. 

IIA full-year gross written premium (GWP) increased 12% to $4.805 billion with double digit growth achieved across all major classes on an underlying basis. 

IAG says rate increases remain the dominant growth driver, averaging 13%. 

Commercial short tail GWP gained 10.7% to $2.283 billion, commercial long tail 18.4% to $1.212 billion and personal 8.9% to $1.31 billion. 

The IIA division provides general insurance products sold through a network of intermediaries to businesses and individuals. 

Commercial insurance is sold under the CGU and WFI brands and personal insurance is mainly distributed through broker and partner channels.