(Reuters) - Insurance Australia Group on Wednesday said first-half profit dropped 9.3 percent, hurt by costly damage from a hailstorm that battered Sydney and the Central Coast in December.
Net profit fell to A$500 million ($361.70 million) in the six months ended Dec. 31, compared with A$551 million a year ago.
IAG, Australia's second-largest insurer by market value, in December flagged A$169 million in costs after it received more than 6,500 claims following the Sydney hailstorm.
IAG's drop in profit could potentially signal weak results for other insurers, with the company adding that claims from net natural peril claims was A$110 million above its allowance.
The storm, which was declared a catastrophe by Insurance Council of Australia, smashed car windscreens and dented panels as they suffered the onslaught of tennis ball-sized hailstones.
Australia's biggest general insurer wrote A$5.88 billion worth of gross premiums during the half, a 4.1 percent drop from A$5.83 billion in same period last year.
IAG posted its first annual decline in three years in 2018, hurt by the explosive revelations of a public inquiry that heard that some of the largest insurers in Australia may have broken laws - some of which carry criminal penalties.
IAG said that it spent A$15 million more in regulatory and compliance costs during the first half of the year as a result of the inquiry.
The Sydney-based firm reported an insurance margin of 13.7 percent for the period, down from 17.3 percent a year ago. It had forecast 2019 reported insurance margin of between 16 percent to 18 percent in its annual results last year.
(Reporting by Aditya Soni and Nikhil Kurian Nainan in Bengaluru; editing by Jonathan Oatis)
