Insurance Australia Group (IAG) is the biggest general insurer in Australia and across the Tasman where it slipped out news yesterday of a change in the way it will be insuring home and contents that will see thousands of policyholders pay more if they live in areas of the country that are more prone to natural disasters such as quakes and floods.
Shareholders in Insurance Australia Group, Australia’s biggest general insurer will feel the pain of the weaker half-year result (courtesy of Sydney’s December hail storm) with a 2 cents a share cut to the interim dividend.
The company will sell its 26% interest in the joint venture with State Bank of India. Total consideration is over $640m with an expected increase in Insurance Australia Group's regulatory capital position of over $400m once the transaction completes.
IAG will sell its interests in Thailand, Indonesia and Vietnam. Credit Suisse suspects the sale price for the loss-making Vietnam operations was probably minimal, given it was undisclosed, while the sale price for the total Thai and Indonesian Holdings was $525m.
The company’s investor briefing signalled confidence to UBS. The broker believes, while potentially disruptive challenges were acknowledged, the strength of the brand and margin tailwinds allow the business to conduct the necessary fixes to legacy systems and prepare for change.