IAG New Zealand’s insurance premiums topped $2 billion in the first-half of its 2025 financial year, the second consecutive time IAG has passed this milestone in the first-half of its financial year.
IAG NZ’s gross written premium (GWP) edged up almost 5% to $2.1 billion in the six months to December 31 2024, from $2 billion in the first half of the 2023 financial period.
GWP is the total amount of money customers are required to pay for insurance coverage on policies issued by an insurer. This $2.1 billion figure was made up of GWP from broker, bank partner and direct channels.
IAG is the largest general insurer in Australia as well as NZ. One in every two households in NZ holds an IAG insurance policy and it insures over $1 trillion of commercial and domestic assets in the country.
IAG NZ trades under the AMI, State, NZI, NAC, Lumley and Lantern brands, and also provides general insurance products sold by ASB, BNZ, Westpac and The Co-operative Bank.
Direct channel underlying GWP rose by 6% to $868 million in the 2025 half-year thanks to IAG NZ’s home portfolio experiencing strong premium growth, new business improvement and renewal rates holding steady.
“Private motor saw low single-digit growth, driven by modest rate increases. New business levels improved, and retention remained steady,” IAG said of NZ in its group results report.
Underlying GWP from IAG NZ’s bank partner channels’ jumped 15% to $306 million, while its broker channel underlying local currency GWP rose around 1% to $902 million.
“A softening commercial market impacted premium growth, but the business maintained its underwriting discipline and successfully leveraged NZI’s strong brand with value-added services including risk advisory,” IAG noted in its report.
Profit up 63%
IAG NZ reported a half-year net profit after tax of $346 million, 63% higher than the insurer's $211 million net profit in the 2024 half-year.
The insurer's underlying insurance margin for the 2025 financial half-year rose to 19.5%, up from 14.9% in the first half of the previous financial period. IAG NZ’s insurance margin for the six months to the 31st December rose to 30.5%, up from 22.3% in the 2024 financial half-year.
IAG NZ’s underlying insurance margin for the 2025 financial half-year rose to 19.5%, up from 14.9%. The general insurer said this reflected the “benign” perils experience it had during the financial period.
Like its rival Suncorp NZ which reported its 2025 half-year results on Wednesday, IAG NZ also zeroed in on NZ’s vulnerability to natural hazards in its latest results.
“In recent months we have seen local and international examples of the devastating impact that climate related natural hazards can have on people and the importance of having a sustainable insurance industry to support their recovery,” IAG NZ Chief Executive Amanda Whiting said
“New Zealand remains highly vulnerable to natural hazards and weather-related disasters which are expected to increase in frequency and severity. So, it is critically important that we take a longer-term view, recognising that today’s profit underpins access to the resources and capital which will be needed to help us recover from the next big event.”
Earlier this week at its AGM, Tower Insurance also warned that NZ needs to clarify climate adaptation funding as a country to avoid a California-style insurance crisis amid rising natural disaster risks.
“Increasing weather volatility, reinsurance costs, government levies and the industry’s move to more granular risk-based pricing will continue to affect customer premiums. Inflation, however, continues to ease, and this is being reflected in current premiums,” she said.
The IAG Group’s catastrophe reinsurance program for the 2025 financial year provides a main catastrophe cover for two events up to $11.1 billion (A$10 billion), with an attachment at $556.7 million (A$500 million).
The insurer has also secured reinsurance cover for long-term natural perils volatility protection starting from 2025 to 2029.
That extra reinsurance cover will provide an extra $1.1 billion (A$1 billion) in additional protection annually which will add up to around $4.4 billion (A$4 billion) over the five-year period for natural peril event costs under $556.7 million (A$500 million).
The IAG Group made $866 million (A$778 million) in net profit after tax and $9.3 billion (A$8.4 billion) in GWP in the six months to the 31st December.
12 Comments
I've initiated a conversation with the bank to determine just how much insurance cover we're required to carry for our mortgage. If our (rural, near-urban) land value alone is greater than the outstanding mortgage, and we have 3 viable residences on that land, then in the event of a total loss the mortgage would still be covered. We're effectively self-insured for residences. And we have another property 300km away included in the mortgage security, and if both properties are impacted by the same event then we'll have bigger issues to worry about.
This may even be something a journalist could take up as a wider mortgage security issue - if someone's property is worth (e.g.) $1M with a land value of $800K and a mortgage of $50K, are they really required to have $800K+ of insurance? If so, by what justification? If not, why isn't this well known?
Overall I feel we're vastly overinsured for our actual needs. The trick will be convincing the insurers we don't want everything they're throwing at us, and the banks that there is no credible threat to their security.
Cancel the insurance , no body at the bank checks, until a mortgage renewal, and as you say a total loss will never be the bank's problem, if you only have a 50k mortgage, just pay it off
I have just been through this exercise with AMI, after insuring with them for 45 years, drop them before they effectively drop you, by premium increases. Insurance was ok before the Christchurch EQ, it's now overpriced for the risk. Work it out, and old house worth 100k at best on a 500k section, in a street with 50 houses, on average you would expect one house in your street to burn to the ground every year, and that just dosent happen. Play around with the numbers, double it to 200k, if it's been rewired , replumbed etc, and still a house doesn't burn, every two years.
If you start talking about a new house the numbers are different, and this discussion is not about something built in the last ten years. If there was ever an example of cross subsidisation this is it, and I don't want to be part of that game.
$1M with a land value of $800K and a mortgage of $50K, are they really required to have $800K+ of insurance? If so, by what justification?
I would imagine it is the rebuild cost if the whole thing fell over or burnt down and the insurance company has to fork out $800k to rebuild. the level of mortgage on the property is irrelevant to the insurance company as that is between you and the bank.
e.g same for a car with full insurance. If I have a loan with the bank to pay it off and it's half paid down then it gets written off, the insurance company replace the car or pay out the value of it. I could then sell the car to pay down the rest of the loan if I choose, just keep paying the loan otherwise, or if paid out I could pay off the loan and buy a cheaper car with the remainder.
Here's my story:
Home insured with ASB (hence IAG). $1.35m replacement value and last year's premium was $3.9k.
This years premium rolls in at $9.8k. The only changes since last year were the adding the garage back into the policy (it had mysteriously dropped off) and acknowledging that the council considered the property is at risk of flooding (1 in 200 hundred year event).
A phone call to their Customer Support line was in order! Some mumblings from their representative about the policy being recalculated at the point those changes were made (Aug 2024) and a prorated addition had been charged and paid at that time. But reviewing the finances and emails says that no extra was paid!
So the question was asked... "What do you have recorded as our premium a year ago?" This was answered with the increasingly popular, "Our systems have been updated in the past 12 months and that might not be accessible." But the representative puts the call on hold and goes off to search.
A short while later... "Hmm, we're not sure about your premium so need to take a deeper look at it and will have to call you back.".
The reply to that, "Thanks and by the way, if everyone is being hit by a 60% increase in premiums there might not be much of an insurance industry as a lot of people might not be able to afford to insure their property".
I'd like to thank one of the commenters on interest.co.nz for putting that on an article a week or two back.
Still waiting on the reply four days later.
I'm not an expert when it comes to insurance, but the premiums vs excess are so out of whack.
Increased my excess by a few hundred dollars, and it would take no more than 3 months to accumulate that excess increase from the savings in premiums. On a total loss, the excess is largely inconsequential if deducted from the payout, so it cannot be tied to the amount of cover they're providing surely?
Like I've said ... The solution is simple.
Government needs to set up a 'retail' insurance company to keep the 'for profit' insurance companies from ripping us off.
Why? You need 20 'players' in any market to create 'competition'.
NZ's retail insurance market has just 3. Yup. Just 3.
Rising car insurance costs leads motorists to consider cheaper third-party policies
Another OMG moment !!!
"Insurance Council of NZ chief executive Kris Faafoi said...." ... "Global reinsurance costs have also increased, he said."
For fucks sake.
"Global reinsurance costs" have fuack all to do with car collision insurance !!!!
Either this is idiot reporting - or idiot leadershiip!!! Or maybe - Mr Faafoi has sold out?
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