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- Insurance Australia Group has taken a 4.89 per cent decrease in share pricing this morning after the company released a varied 2019 financial year round up
- With net profits after tax up 16.6 per cent, the company hung its head bearing a 13 per cent decrease in insurance profits
- Not letting a decrease get in the way, the company spent considerable cash over the year funding startups Airtasker and UpGuard
- In good news for shareholders, IAG investors will be paid identical dividends from last year – 20 per cent per share, 70 per cent franked
Insurance Australia Group is trading 4.89 per cent lower in the ASX this morning as the company released a 2019 financial year roundup missing some targets.
The company’s net profits after tax are up 16.6 per cent from 2018’s financial year. This is a massive increase from $923 million to $1.076 billion.
$200 million of these profits alone came from operations in Thailand.
“We have had a successful year which reflects the work we have done to better connect with our customers,” CEO Peter Harmer said.
However, the company’s largest target on its back comes from a 13 per cent decrease to insurance profits – dipping to $1.22 billion.
“At the reported margin level, our improved underlying performance was outweighed by higher costs from natural disasters and significantly lower prior period reserve releases,” the CEO explained.
“We’ve continued to adapt our business to meet the changing needs of our customers while also developing products that fall outside traditional general insurance to better cater to those need.”
The company recently poured $19 million on top of an existing $75 million to help fund new operations in startups Airtasker and UpGuard.
Airtasker, based in Sydney, is like if your social media app was made to hire hands for errands. Similar to Boston-made TaskRabbit, if you need furniture moved, for example, take to the app and put out the word for some quick work done.
UpGuard, on the other hand, is a little less experimental. The Aussie-led cyber security company was founded over in California back in 2012 – the same year as Airtasker.
For your automotive and boating needs, IAG has splashed quite a bit of cash to cover some new avenues while expanding on old ones.
“We’ve expanded our ShareCover host property rental insurance product to include other shared economy offerings like Rideshare, Boatshare and TaskCover,” Peter said.
“In June we acquired a 51% stake in Carbar, a digital car trading platform that caters to the growing appetite for alternative forms of vehicle ownership and gives us an opportunity to design complementary forms of insurance.”
Meanwhile in the east, the company is looking to sell off a major investment in India. The company wants to sell off its 26 per cent stake in Mumbai-based SBI General Insurance.
In good news for IAG shareholders, they’ll see lightning strike twice. The company says it will pay out a 20 per cent dividend, 70 per cent franked.
This payout is identical to dividends to shareholders last year.
“Over the last year we have significantly increased our focus on risk, strengthening our business so we can continue to deliver the best outcomes for our customers – and all those who depend on us,” Peter Harmer said in closing statements.
“We are using data to gain insightful risk perspectives and support rapid decision making, and we are strengthening our enterprise-wide capabilities to better manage current and emerging risks.”
Yesterday, the company’s shares closed at $8.08. Today, IAG is trading for $7.69 a piece in an $18.67 billion market cap.
