IAG UK is expected to “move towards breakeven in FY2012,” according to IAG group chief executive Mike Wilkins.
Speaking at a market strategy briefing today, Wilkins said that the UK unit, which includes Lloyd’s insurer Equity Red Star, was on the road to recovery.
“In the UK, our energy is directed wholly on restoring profitability through the comprehensive remediation programme currently underway,” Wilkins said. “We have made solid progress with this programme and expect to move towards breakeven in FY12.”
IAG UK made a larger-than-expected insurance loss of A$121m for the six months to 31 December 2010 – the first half of IAG’s financial year. The division was hit by further reserve strengthening for bodily injury claims in its motor business and winter weather claims.
Wilkins has previously insisted that IAG will try to fix its ailing UK arm rather than sell it. The remedial action includes aggressive repricing of IAG UK’s motor business.
