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iag IAG announces 1H21 results 10 February 2021 Financial indicators 1H20 1H21 Change GWP ( $ m ) 5,962 6,188 3.8 % Insurance profit1 ( $ m ) 501 667 33.1 % Underlying insurance margin2 ( % ) 16.9 % 15.9 % 100bps Reported insurance margin ( % ) 13.5 % 17.9 % 440bps Net profit / ( loss ) after tax ( $ m ) 283 ( 460 ) nm Cash earnings ( $ m ) 380 462 21.6 % Diluted cash EPS ( cps ) 15.98 17.88 11.9 % 10.0 7.0 30.0 % 12.1 % 15.5 % 340bps 1.15 1.19 4bps Dividend ( cps ) Cash ROE ( % ) CET1 multiple " We have seen a strong underlying performance across our businesses over the last six months and we will build on this performance as we sharpen our focus to deliver a stronger , more resilient IAG . We delivered 3.8 % gross written premium ( GWP ) growth ( 1H20 : 1.4 % ) over the six months - a strong result in these uncertain conditions . Growth was predominantly driven by rate increases in our commercial and home insurance businesses in Australia and across all key classes in New Zealand . It was also underpinned by some customer growth in New Zealand's direct brands and high retention rates in our commercial portfolios in Australia . We have strong margins across the business . Our underlying margin² of 15.9 % was an improvement on 2H20 ( 15.1 % ) and benefitted from lower motor claims as a result of COVID - 19 . Our insurance profit¹ of $ 667 million ( 1H20 : $ 501 million ) equated to a higher reported margin of 17.9 % ( 1H20 : 13.5 % ) . In addition to the COVID - 19 effect , this result benefitted from a relatively benign natural perils period , which meant we came in $ 39 million lower than our natural perils allowance , and credit spreads were favourable . While our business has been relatively stable , our profitability was affected by the pre - tax $ 1.15 billion expense we announced in November for potential business interruption claims relating to COVID - 19 . Our business interruption policies were never intended to cover pandemics . However , following the Supreme Court of NSW Court of Appeal decision on the COVID - 19 business interruption test case , we conducted a detailed review to determine our potential exposure , and took action to strengthen our balance sheet . This has helped ensure we remain well capitalised and we have today announced a dividend of 7 cents per share which represents a payout ratio of 37 % of cash earnings . Over the past few months , we have put in place measures which I believe will further strengthen the business . We've restructured the business , splitting our Australia Division into Direct Insurance Australia and Intermediated Insurance Australia to better align our brands to our customers and to bring a stronger focus to our commercial and personal intermediated businesses . We are acting decisively to address the issues facing our business . We are working with the broader insurance industry to get clarity on how our business interruption policies should be interpreted in the context of COVID - 19 , and we continue to make progress on our customer remediation program . And today we have outlined our strategy which will allow us to deliver IAG's full potential over the next three to five years . At IAG we have a great history , strong foundations and a clear purpose . I'm excited about IAG's future and our opportunity to make the world a safer place for more than 30 million Australians and New Zealanders . " Nick Hawkins IAG Managing Director and Chief Executive Officer 1 The 1H21 reported insurance profit in this document is presented on a management reported ( non - IFRS ) basis which is not directly comparable to the equivalent statutory ( IFRS ) figure in IAG's 1H21 Financial Report ( Appendix 4D ) . A reconciliation between the two is provided on page 8 of IAG's 1H21 Investor Report and on page 3 of the Financial Report to comply with the Australian Securities and Investments Commission's Regulatory Guide 230. IAG's 1H21 net loss after tax is the same in this document and in the Financial Report . 2 IAG defines its 1H21 underlying insurance margin as the reported insurance margin adjusted for net natural peril claim costs less the related allowance ; reserve releases or strengthening and credit spread movements . Prior to FY21 , the definition adjusted for reserve releases in excess of 1 % of net earned premium . Comparative periods have not been restated to incorporate the FY21 definition . Page 1 of 5 THIS RELEASE HAS BEEN AUTHORISED BY THE IAG BOARD IAG 1H21 results