IN­SURANCE AUS­TRALIA PROFIT FALLS ON UK WRITE-OFFS

Source: The Star, 23 Au­gust 2012

Insurance - - COMPANY CORNER -

In­surance Aus­tralia Group (IAG), the coun­try's top car and home in­surer, re­ported 17.2% fall in an­nual net profit af­ter writ­ing off the en­tire good­will of its UK op­er­a­tions. While IAG is ex­pand­ing into Asia, it is re­view­ing its ail­ing UK op­er­a­tions af­ter mul­ti­ple write-offs. The com­pany posted a sec­ond-half profit of A$119 mil­lion com­pared with A$89 mil­lion a year ago. Its an­nual net profit fell to A$207 mil­lion from A$250 mil­lion last year. In­surance mar­gin stood at 10.6% and IAG ex­pects its mar­gins to im­prove to 11%-13% this year. The com­pany an­nounced a div­i­dend of 12 cents. IAG also an­nounced the re­view of the UK op­er­a­tions, which con­trib­utes 7% of its gross writ­ten pre­mium in May. A re­view of IAG's past dis­clo­sures showed the UK busi­ness had a net tan­gi­ble value of A$250 mil­lion with good­will and in­tan­gi­ble mak­ing up around A$300 mil­lion. IAG has spent about A$1.7 bil­lion since 2006 to ex­pand in the UK, but has taken mul­ti­ple charges to cover ad­di­tional claim.

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