27 Jul 2010

Australian insurer expects profits to halve

3:42 pm on 27 July 2010

The Australian owner of State Insurance and NZI says it expects its after-tax profits to halve to $A91 million for the year to June.

Insurance Australia Group is Australia's largest home and car insurer. IAG says the drop is due to its struggling business in the United Kingdom and a rise in the number of weather-related storm claims in Australia.

Meanwhile, the chief executive of IAG's New Zealand business, Ian Foy, will move to the UK to take over operations.

IAG has spent $A1.7 billion in a bid to expand its market in the UK, but returns have been unsuccessful.

IAG group chief executive Mike Wilkins says Mr Foy's track record in improving the company's New Zealand business and his previous experience in Britain makes him the clear choice to lead the UK operation.