Insurer's $200m profit exorbitant - critics

Last updated 05:00 20/08/2014

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Cantabrians still waiting for post-earthquake insurance settlements will find IAG New Zealand's $200 million profit "obscene", advocates say.

The Australian-owned company's pre-tax profit leapt past $200m - up 56 per cent on the previous year to June 30.

IAG NZ is the largest general insurer in New Zealand, trading under the State, NZI and AMI brands.

Are you waiting for an earthquake settlement from State, NZI or AMI? email

A spokeswoman for volunteer-run Christchurch advocacy group said the profit was exorbitant.

"I suspect many Cantabrians facing more winter weather in broken houses would find [it] obscene," she said.

The group had found through its customer-satisfaction surveys that "in general the IAG group of companies rate very poorly".

"Their track record is not impressive. The saddest thing is... that IAG has just bought Lumley, which was one of the highest-rating companies."

Labour earthquake recovery spokeswoman Ruth Dyson said IAG NZ's profit would inspire a mix of relief and anger in those still waiting for settlements.

"It will be a great relief to people who are assuming the reason they have not received their settlements is because the company has run out of money. We don't want [IAG NZ] to go broke, because we want them to settle all their claims," Dyson said.

"It will feel to many as if insurance companies are making profits at our expense."

IAG NZ chief executive Jacki Johnson was unavailable for an interview yesterday, but has previously said she could not promise premiums would not continue to rise.

The company was mindful of the affordability of insurance but had to price correctly for the risks it faced, she said. In a statement yesterday, Johnson said the underlying profitability was expected to remain strong as IAG focused on "improving operational efficiencies". Settling Canterbury earthquake claims continued to be the most pressing priority.

As at June 30, IAG had completed more than $3.3 billion of settlements, representing about 58 per cent of all claims. The firm said it expected all residential rebuilds would be under way by the end of next year, but pushed out its completion date to mid-2016.

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