New Zealand is currently responsible for 17% of IAG’s gross written premium (the total revenues expected from the life of an insurance contract), and Managing Director and CEO Mike Wilkins only expects that number to increase.
“In New Zealand we are targeting GWP growth at least in line with the industry and an underlying margin of around 10% over the longer term, which represents a strong return on capital given the short-tail nature of the business,” said Wilkins in a statement today.
Jacki Johnson, IAG’s New Zealand CEO, noted that the country’s insurance industry is currently undergoing some major reforms, and IAG has been with the government every step of the way to make sure its business remains “sound and efficient.”
As New Zealand’s industry changes, so has IAG’s model. NZI, the company’s intermediated business, is focusing on appropriate price and sustainable risk underwriting. At the same time, its two direct insurance businesses, State and AMI, are merging services to save IAG an expected NZ $30 million annually by April 2014.
If all goes as planned, IAG will remain the country’s largest general insurance provider and, with any improvements, increase its 40% market share and NZ $2 billion premium base in the years to come.
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