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Speaker 1: Now New Zealand's biggest insurance company, IAG has reported a

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Speaker 1: half a billion dollar profit for the year. That's up

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Speaker 1: nearly one thousand percent on last year. This is the

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Speaker 1: company that owns State Ami INSIYE various others as well.

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Speaker 1: Amanda Whiting is the chief executive. Hey, Amanda, hi here

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Speaker 1: there are you going? Well? Thank you? That's a big one,

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Speaker 1: isn't it?

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Speaker 2: The year?

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Speaker 1: Yeah?

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Speaker 2: Half a billion big year.

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Speaker 1: Why do you say it's a big year.

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Speaker 2: It's been a big year because we've been working through

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Speaker 2: the tail end of our claims from the big event

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Speaker 2: in twenty three. It's also been a big year because

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Speaker 2: we've been focusing in on supporting customers. So we know

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Speaker 2: as sort of experience and the cost of living challenges,

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Speaker 2: so we've been doing a fit bit around that. We're

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Speaker 2: making sure that we're bolstering our customer care team, making

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Speaker 2: sure that we're supporting those customers who do need that

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Speaker 2: support through things like deferring their payments or pausing their insurance,

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Speaker 2: reviewing their cover, making sure they're not paintings that they

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Speaker 2: don't need, looking at ways that we can support them

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Speaker 2: around payment methods, and making sure we're not charging them

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Speaker 2: to that and then also obviously making sure we're at

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Speaker 2: claims time if it makes sense, then we're waiving excesses.

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Speaker 2: You know, it's pretty important from a profit perspective that

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Speaker 2: we run a sustainable business. We need to be here

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Speaker 2: to pay claims. And if you compare this year to

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Speaker 2: last year, sure there's a big difference, but actually if

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Speaker 2: you look over the last five years, it's it's about

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Speaker 2: the same. Well, it is about the same underlying so.

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Speaker 1: Well, because but you're talking about underlying, let's just look

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Speaker 1: at the net profit right this year is five hundred million.

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Speaker 1: Year before, sure, yeah it was a low one. It

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Speaker 1: was less than fifty year before two four two, two

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Speaker 1: hundred and forty two million, year before three hundred and

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Speaker 1: thirty four million, year before three hundred and fifty seven million.

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Speaker 1: Five hundred million is much bigger than anything else.

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Speaker 2: There, much bigger base to heather. So one of the

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Speaker 2: things that I'd like to highlight is we cover over

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Speaker 2: a trillion dollars worth of our sets currently. Over those

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Speaker 2: years that would have been a lot different. And so

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Speaker 2: you know, cover a trillion dollars of assets. You need

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Speaker 2: to make sure that you are making money because we

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Speaker 2: absolutely needed to make money to pay claims, and we

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Speaker 2: can't predict what's going to happen, So something could happen

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Speaker 2: today and we need money in the account to pay

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Speaker 2: claims for customers perceiving it or to worry. And that's

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Speaker 2: really important because it's such an important part of our economy.

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Speaker 2: You know, we need to make sure that there are

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Speaker 2: sustainable insurance companies out there that are able to pay claims.

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Speaker 1: So this year, the retail customers pay premium increases of

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Speaker 1: nineteen percent? Is that right?

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Speaker 2: Yeah? That is right? Yep?

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Speaker 1: Or was it the year before?

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Speaker 2: I think it was slightly less For what I've been

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Speaker 2: in the high high single digit.

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Speaker 1: I think it was twelve. Well, at least that there

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Speaker 1: was the gross the gross profit, yeah, premium.

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Speaker 2: Look at the thing, and if I talk about.

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Speaker 1: Amanda and the year before, I just want to I

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Speaker 1: just want to follow this through though. In the year

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Speaker 1: before it was seven percent. So what's going on here?

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Speaker 1: Like if we just look at the gross premium that

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Speaker 1: you're charging fifteen percent this year down to seven percent

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Speaker 1: two years ago, how has it more than doubled two years?

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Speaker 1: How's that justifiable?

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Speaker 2: Oh, there's a lot of input costs here. Head One

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Speaker 2: of the biggest drivers of the cost is reinsurance and

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Speaker 2: we all know that reinsurance is actually the insurance that

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Speaker 2: we buy to ensure that we're protecting against a big event.

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Speaker 2: Over the last three years, our insurance has gone up

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Speaker 2: sixty one percent and that has had a significant impact

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Speaker 2: on premiums in New Zealand. And so again, we just

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Speaker 2: need to make sure that we are you know, charging

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Speaker 2: the premier and it's appropriate to make sure that we're

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Speaker 2: a sustainable business.

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Speaker 1: I mean, that would be okay, right, Amanda, would be

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Speaker 1: I would be fine with that if you guys were

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Speaker 1: ending up with a profit that looked a little bit

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Speaker 1: lease than it is. But it looks like you're banking

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Speaker 1: a lot of that stuff for yourselves. It's not just

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Speaker 1: going out to the reinsurers.

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Speaker 2: Yeah, look, I think it is. I mean, it's a

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Speaker 2: pretty volatile industry to be in. You'll see this go

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Speaker 2: up and down. You need to look at a multi

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Speaker 2: year event like we just seemed to look at that

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Speaker 2: through the multi years and you know, it might look

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Speaker 2: on its own like it is a large profit, but

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Speaker 2: remember where anything could happen tomorrow. When we had two

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Speaker 2: hundred claims out of an event last week. You can

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Speaker 2: just have these events just pop up at any time,

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Speaker 2: you know, I get that.

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Speaker 1: Okay, So do you need to have a certain level

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Speaker 1: of cash in the bank in order to feel yet comfortable.

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Speaker 1: We can cover everything.

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Speaker 2: Absolutely when we want to have the right level of capital. Oh, look,

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Speaker 2: it's a different you know, we structure our capital quite differently,

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Speaker 2: and I am not the expert on that, but we

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Speaker 2: need to make sure that we've got the right level

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Speaker 2: of capital.

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Speaker 1: What happens when, Amanda, when you guys have got enough

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Speaker 1: money in the bank, do you start dropping the premiums

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Speaker 1: right down to single figure increases again?

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Speaker 2: Yeah, look what I am expecting to see this year, Actually, Heather,

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Speaker 2: it is a bit of relief. So we're looking at

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Speaker 2: sort of being much more in line with inflation this year.

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Speaker 2: Because we have secured our reinsurance, we're seeing some of

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Speaker 2: the inflation come off and we want to pass that

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Speaker 2: back to customers. And when the other thing that we

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Speaker 2: do is we're focusing on our own expenses. Of course,

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Speaker 2: that's really important. We don't want to be charging customers

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Speaker 2: more than they need to pay. So we've been doing

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Speaker 2: a lot of work reducing our extincts so that we

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Speaker 2: are not part of anything additional customers.

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Speaker 1: All right, So what CPI at the moment, is it

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Speaker 1: like about three and a half or thereabouts.

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Speaker 2: Yep, about that.

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Speaker 1: So that's what we should be looking forward to as

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Speaker 1: a three and a half percent premium increase.

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Speaker 2: Yeah, we're seeing, we absolutely seeing things stabilize. So I'm

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Speaker 2: thinking that it's going to be more like that for

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Speaker 2: our personal ed customers.

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Speaker 1: Well, that just sounds fantastic. Amanda really appreciated. Amanda Whiting,

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Speaker 1: chief executive at IAG New Zealand. For more from Hither

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Speaker 1: Duplessy Alan Drive, listen live to news talks. It'd be

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