Please explain: IAG forced to clarify after warning of loss.

Australasian Business Intelligence, July, 2002

ABIX via COMTEX) -- On 1 July 2002, the Australian Stock Exchange asked Insurance Australia Group (IAG) to clarify its outlook. This followed IAG's announcement in late June that it was likely to incur a bottom-line loss for the year to June 2002 as a result of weak investment markets. IAG responded by saying that its underlying insurance business was performing well but that weak equity markets would hurt its bottom-line. Deputy MD, Ian Brown, said that a one per cent fall in equity markets reduces IAG's pre-tax profits by $A31m. In the six months to June, the S&P/ASX 200 Accumulation Index has fallen by 4.4, while the MSCI World Index (excluding Australia) unhedged has fallen by 13.3. Brown said this indicates a weighted average loss on IAG's equity portfolio of...

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