Higher premiums, lower payouts boosts IAG’s insurance profit

Wednesday, 13 August 2025

It was a terrible year in 2023 for extreme weather claims, but 2024 was a much less stormy period for insurers like IAG.

IAG, the country’s largest house, car, contents and business insurer, has reported a large rise in insurance profit in the financial year to the end of June.

The owner of the State, AMI and NZI brands made an insurance profit of A$606 million (about NZ$664m) up from A$457m (NZ$501m) in the previous year.

That was a result of charging policyholders higher premiums, and the insurer having to pay out on fewer natural disasters.

Premium increases for households were lower than in the previous year, said Amanda Whiting, chief executive of IAG New Zealand.

“We are conscious of the financial pressures many New Zealanders are experiencing,” she said.

“Delivering on our strategy and investing for growth, alongside falling inflation has allowed us to provide lower rate increases for customers over the course of the year.”

New modelling from Earth Sciences NZ and the University of Waikato shows that as global temperatures rise, extreme storms like Gabrielle could dump 30–35% more rain. While the number of cyclones is unlikely to increase, they’ll be far more intense.

She expected premium increases to continue to be lower this year.

Insurers are reshaping the market with a shift towards deeper risk-based pricing on homes.

This is seeing owners of homes that are at higher risk of disasters like floods, landslips, coastal inundation and earthquakes paying more for their insurance compared with owners of properties in safer locations.

That shift, and memories of the 2023 North Island floods, has seen rising awareness among renters and homebuyers of the flooding risks of the properties they are considering making their homes.

Earlier on Wednesday, The Post reported on the high numbers of homeseekers and homeowners checking in every day on Auckland Council’s Flood Viewer.

In June, IAG published its annual Climate Survey which appeared to show that most people support the move to owners of riskier assets paying more for their insurance.

And 67% told surveyors they felt it was okay for an insurer not to offer insurance to new customers if their home was in a location that was “unsafe”.

Whiting said: “IAG is committed to keeping insurance accessible and affordable for New Zealanders and will continue to advocate for a pragmatic approach to address the growing risk of extreme weather and natural hazards.

IAG New Zealand’s chief executive Amanda Whiting.

“The path forward is clear: invest in better hazard data, make smarter planning decisions, strengthen infrastructure, and, where necessary, relocate communities out of high-risk areas.”

IAG NZ's parent company is ASX-listed IAG and its shares are traded on the Australian ASX sharemarket.

It reported a net profit after tax of A$1.36b (about NZ$1.49b) compared with A$898b in the previous year.