IAG’s full-year net profit fell 24.8% to $1.022 billion amid higher natural peril costs and after a business interruption provision release boosted the previous period.

Gross written premium increased 7.6% to $18.4 billion and the underlying insurance profit rose 2.3% to $1.578 billion, the insurer says.

“In a year of elevated natural perils, our financial results reflect the deliberate strategic choices we have made to reduce volatility and deliver sustainable, growing shareholder returns,” CEO Nick Hawkins said this morning.

IAG responded to 65 severe weather events across Australia and 44 in New Zealand, and paid about $12.4 billion in claims over the year.

The Australian retail business reported GWP growth of 17.8% to $10.308 billion, including $1.272 billion from the RACQ Insurance acquisition.

Intermediated business GWP grew 1.1% to $4.6 billion, while New Zealand GWP fell 8% to $3.5 billion as a weakening NZ dollar affected the result. In local currency terms, GWP decreased 2.7% amid positive retail conditions and commercial segment challenges.

In May, IAG outlined its Ambition 2030 plan, which targets having more than 11 million customers and GWP above $25 billion.

The insurer is awaiting an Australian Competition and Consumer Commission decision on its proposed acquisition of RAC Insurance. IAG has provided a series of commitments to address concerns and a response is expected later next month.

“Operating in growing markets, we will continue to focus on organic opportunities to increase our market share,” Mr Hawkins said. “Our alliances with RACQ in Queensland and RAC in WA are expected to deliver further scale.”

IAG expects GWP growth of 5%-8% in the coming year, reflecting mid single digit retail growth and low single digit intermediated growth, as well as a full-year RACQ contribution.