The Insurance Australia Group Ltd (ASX: IAG) share price is up 14% in calendar year 2019 already to sell for $7.90 and the insurer's shares have also gone without the rights to a 12 cents per share dividend over the period.
For the six-month period ending December 31 2018, IAG posted a net profit of $500 million on gross written premiums of $5,881 million, with the two metrics down 9.3% and up 4.1% respectively.
Unfortunately though cash earnings were down 49% to $319 million in a result that contributed to the 14% fall in the dividend to 12 cents.
Taking a chunk out of profit margins in the first half was the December 2019 Sydney hailstorm and reportedly adverse credit spread movements.
Back in June 2015, Warren Buffett's Berkshire Hathaway investment vehicle famously agreed to take a 3.7% stake in IAG and wear some of the claims costs in return for receiving an equal proportion of the premiums.
IAG has also followed the strategy of rival QBE Insurance Group Ltd (ASX: QBE) in selling or trying to sell much of its South East Asian operations in an attempt to "shrink to greatness".
Over the half IAG sold its Thailand business and is trying to sell its Vietnamese and Indonesian operations, with Asian insurance markets proving tougher than the local insurers expected.
The stock offers a 4% trailing yield or 5.2% when including the impact of a 19.5 cents per share special dividend.
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