IAG cuts premium growth forecast

Insurer upwardly revises insurance margin guidance, warns investors of lower gross written premium growth.

Insurance Australia Group (IAG) has upwardly revised its fiscal 2014 insurance margin guidance and reduced its forecast for premium growth.

In a statement to the Australian Securities Exchange, IAG said it has lifted its full-year insurance margin guidance to 14.5% to 16.5%, up from the previously advised 12.5% to 14.5%.

The insurer reduced its full-year gross written premium growth guidance to three per cent to 5%, compared with the previously advised 5% to 7%.

For the first half, the group expects gross written premium growth of 4%, or 6% after allowing for the end of the Victorian fire services levy.

IAG expects to report a first-half insurance margin of around 17.5% when it announces its results next month.

"We expect to record a strong first half underlying performance which builds on the improvement evident in prior periods," chief executive officer Mike Wilkins said.

"The reported result is also expected to benefit from higher than originally anticipated reserve releases."

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