The Insurance Australia Group Ltd (ASX: IAG) share price has moved 3.81% higher this morning following a positive business update, as the S&P/ASX 200 Index (ASX: XJO) also moves into positive territory again today.
IAG to employ 400 new staff
IAG noted in its release today that it believes that it is already well positioned to operate throughout the coronavirus crisis, with more than 90% of its staff already working from home and plans underway for the remainder to also be transitioned to a home office environment.
In addition, IAG noted that it will be employing up to 400 more staff in the customer-facing parts of its business in the weeks and months ahead to meet growing demand.
IAG is also transitioning to digital assessments with customers wherever possible to minimise face-to-face interactions.
Some of the new measures that IAG announced last week included the issuing of refunds for travel insurance going forward for the unused parts of premiums, without penalty.
A number of measures have also been implemented to assist small businesses facing financial hardship during the crisis, including the deferral of premium payments for up to 6 months and the issuing of full refunds if insurance policies are cancelled.
In addition, full insurance cover will be maintained for small businesses which are forced to close during the crisis. Similar measures were announced late last week for IAG's New Zealand division.
Completion of SBI General sale and strong capital position
IAG also announced today that the sale of its 26% stake in SBI General in India has now been completed, with the insurance provider set to benefit from a net profit of approximately $310 million in the second half of FY 2020. IAG will also benefit from an increase in its regulatory capital position of around $450 million.
IAG noted that its common equity Tier 1 (CET1) ratio had reduced to 1.09 by the end of February, following the high incidence of natural disaster events such as bushfires in the first 2 months of this year, however its CET1 ratio is now estimated to be at the top end of its targeted range, of between 0.9 and 1.1.
The insurance provider also confirmed its FY 2020 guidance remains unchanged, with low single digit growth in gross written premium and a margin guidance of between 12.5% and 14.5% still anticipated .
IAG had lowered its guidance range to between 14.5% and 16.5% in late January due to hailstorms. However, subsequent heavy rain events saw the insurer lower this range by a further 200 bps when it announced its full year results in mid February.
