The Insurance Australia Group Ltd (ASX: IAG) share price is dropping lower on the day of its annual general meeting.
At the time of writing, the insurance giant's shares are down 0.5% to $4.88.
Why is the Insurance Australia share price dropping lower?
Investors have been selling the company's shares this morning following the release of a first quarter update ahead of its annual general meeting.
That update reveals that for the three months ending 30 September, Insurance Australia has recorded low single digit gross written premium growth. This is despite the company incurring an adverse foreign currency translation effect from New Zealand.
Insurance Australia's retiring Managing Director and CEO, Peter Harmer, also advised that its insurance profit for the quarter was reflective of the seasonally low incidence of natural peril events in the current period. No actual figures were provided.
In addition, underlying profitability has been similar to the second half of the previous financial year and the company continues to retain a strong capital position. The latter is well above its targeted benchmarks.
Mr Harmer also provided an update on how the pandemic is impacting the company's business.
He explained: "Within our underlying insurance margin, COVID-19-related effects have been broadly neutral in aggregate during this period, with some benefit from lower motor claims frequency offset by incremental expense and provisioning impacts."
Outlook.
The soon-to-retire chief executive is optimistic on the company's outlook.
He commented: "Despite the uncertainty confronting us, including that from COVID-19, we face the future with the confidence that we have a resilient business which is in strong financial shape, and which is well‐ equipped to rise to the challenges presented by this current environment."
This future will be led by incoming CEO, Nick Hawkins, who commences in the role on 2 November. The company's Chair, Ms Elizabeth Bryan, believes Insurance Australia is in safe hands.
She commented: "I'm very pleased that we have been able to appoint a new CEO from within the ranks of our current management team. At a time of significant external disruption, we see tremendous value in the stability and continuity that comes from making an internal appointment."
