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 ASX.
Recently, IAG announced that it will book a one-off pre-tax write-down of $365 million, relating to a jump in bodily injury claims in the UK region.
As a result of the write-down, the group lowered its FY10 insurance margin guidance to between 6.0% – 7.0%, from the previous guidance of 9.5% – 11.0%.
The company said it also expects FY11 gross written premium growth to be in the vicinity of 3% – 5%, conditional on no material movement in foreign exchange reserves and investment markets.
IAG shares slumped more than 6% on the day of the announcement, which was significantly worse than the Australian stock market’s loss of 0.7%.