Insurance Australia Group (IAG) is a leading insurer, with operations in Australia, New Zealand and Asia. Some of its major brands include NRMA, SGIO, and Swann Insurance. It is also one of the biggest insurance companies in the Australian stock market.
IAG expects to report a 50% drop in FY10 net profit to $91 million, from last year’s $181 million.
IAG anticipates an insurance margin of 7%, which was within previous guidance, and a final dividend of 4.5 cents per share.
IAG stated that that profit and insurance margin were affected by substantial losses in its UK business and above budget natural peril claim costs.
IAG’s latest downgrade follows yesterday’s profit warning from QBE Insurance (QBE), indicating inherent weakness among the Australian insurers.
IAG Australian share price slumped over 4% on announcement.