UK underwriting loss for Equity owner

The news came as IAG confirmed it had written off AU$297m of goodwill and intangible assets in the UK business and was still pursuing a strategic review which could lead to a sale.

The AU$23m underwriting loss was however a considerable improvement on the previous year when the UK division posted a AU$192m deficit.

The provider's UK combined operating ratio improved to 104.6% from 135.6% the previous year while gross written premiums fell 9% to AU$497m (2011: AU$546m).

The total result for the division came in at an AU$15m loss again improved from AU$179m in 2011.

IAG's business in the UK - which consists mainly of Equity Red Star, the Equity Insurance Partnership, Barnett & Barnett and NBJ - accounted for 5.5% of the group's GWP in its 2012 results compared to nearly 7% the previous year.

Improving performance
In its statement the insurer noted: "The performance of the UK business has continued to improve in FY12, as benefits of the extensive programme of remedial actions have been realised.

"The business posted a small insurance loss of AU$13m for the full year (FY11:AU$181m loss), in line with expectations of a close to breakeven result."

Across the full group GWP grew 11.7% to AU$8.99bn while net profit after tax fell 17.2% to AU$207m (2011: AU$250m).

Managing director and chief executive officer at IAG, Mike Wilkins, commented: "We have seen significant uplift across key financial measures and have made great inroads against
our strategic priorities.

"I'm very pleased with what we have achieved."

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