Insurance Australia Group turned a profit in the first half of the 2022 financial year and is looking forward to a favourable operating environment over the next six months.
Australia's biggest insurer owns the national home and car insurance group NRMA and similar businesses in Victoria, South Australia and Western Australia.
IAG on Friday reported a net profit of $173 million for the half-year ended December, after a loss of $460 million in the previous corresponding period, on revenue of $9.2 billion.
Gross written premium income rose 6.2 per cent to $6.6 billion, on the back of higher premium charges and volume growth.
Managing director Nick Hawkins said these rates increases had flowed through to better profit margins.
The gross written premium was helped by the introduction of NRMA to South Australia and Western Australia.
IAG noted claims for vehicle insurance fell during the period when most of the eastern seaboard was in lockdown due to the spread of COVID-19.
But natural peril clams for disasters such as floods, tornadoes and storms, cost the group $681 million, which was $299 million above expectations.
Looking ahead, IAG projects its GWP income will continue to grow in the second half.
"The 2022 financial year guidance aligns to IAG's aspirational goal to achieve a 15 per cent to 17 per cent insurance margin over the medium term," it said in a statement.
The company is also using new software to handle most customer claims and reduce the cost of doing business.
Mr Hawkins said he wanted more than 80 per cent of customer inquiries going through the online system.
IAG will pay a first-half dividend of six cents per share, down from seven cents previously.
IAG brands include RACV, SGIC, SGIO and Swann Insurance.
Shares were up three per cent to $4.71 at 1257 AEDT.
The shares traded as high as $8.74 on July 30, 2019, less than 12 months before the pandemic.
