New Zealand’s largest insurer - Insurance Australia Group - has pushed up interim net profit by 170 per cent but its boss singled out last month’s Auckland floods as cutting its full-year forecast outlook.

The ASX-listed business specifically named the city’s January 27 fatal deluge as taking a toll on its full-year result.

Nick Hawkins, managing director and chief executive, expressed confidence in the FY23 outlook but said the floods would have an effect on the June 30, 2023 result.

The insurer gave a market update on February 3 where it forecast full-year premium growth to be around 10 per cent, an increase from the previous guidance of mid to high single-digit growth.

 “We expect our FY23 reported insurance margin to be around 10 per cent compared to our previous range of 14 per cent to 16 per cent. This is largely due to the expected higher natural perils costs from the Auckland flood event,” Hawkins said.

He also cited “challenging” market conditions but said the company was keeping more customers.

The ASX-listed business declared net profit after tax of A$468 million for the half-year to December 31, 2022, up from A$173m in the previous corresponding period. That is a 170 per cent rise.

But the boosted figure included a business interruption provision release of A$252m post-tax. Excluding that amount, the underlying NPAT was A$216m, so still well up on the previous $173m.

The giant’s brands in New Zealand include State, NZI, AIM and Lumley.

Hawkins told the ASX today that the company had delivered an improved net proft after tax and reported margin in the first half in “challenging economic conditions”.

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Covid, floods and higher inflation are just some of the issues which are dogging the sector.

The business said it had maintained good cost discipline and its businesses were in good shape.

“Our focus on growth and profitability delivered the strongest first half gross written premium growth in seven years, up 7.5 per cent,” Hawkins said.

IAG is also keeping more clients: “What’s encouraging is the higher customer retention rates we continue to hold across our brands,” he said.

“The deteriorating inflationary environment in the half year had an immediate impact on our businesses,” it said.

In New Zealand, growth was 9.1 per cent in gross written premiums.

The company said it had added more than 100,000 direct customers in Australia and New Zealand.

IAG New Zealand is this country’s largest general insurer, trading under our brands AMI, State, NZI, NAC, Lumley and Lantern and via banking partners ASB, BNZ, Westpac and The Co-operative Bank. It employs more than 3500 people, and insures more than two million New Zealanders and more than $680 billion of commercial and domestic assets.