The news sent the company’s shares up 4% to A$4.74, their highest level in more than two months.
Adverse weather conditions in Australia have triggered a wave of claims, prompting many insurers to revise their cost estimates upwards to cover natural hazard claims for the full year.
Earlier this week, its counterpart Suncorp reported a 29% drop in first-half cash profits.
IAG, Australia’s leading general insurer, said natural hazard net loss costs were A$681 million ($487.94 million) for the six-month period, or nearly $299 million. Australians more than the provision he had made for the period.
The company posted cash profit of A$176 million for the six months to December 31, compared with A$462 million a year earlier, but declared a dividend of 6 Australian cents per share.
Citi had estimated the cash profit at A$129 million and the dividend at 5 Australian cents.
($1 = 1.3957 Australian dollars)