Recently we updated our valuations for Insurance Australia Group and Pacific Brands, whose shareholders have had very different experiences.
Insurance Australia Group announced a strong fiscal 2014 result, with insurance profit up 11 per cent to $1.58 billion. The result was supported by higher than expected reserve releases in a particularly low-claims environment. The insurance margin widened 110 basis points as a result to 18.3 per cent. The full-year dividend has more than doubled in two years.
The result contrasts with IAG’s unimpressive historical performance.