Insurance Australia Group to beat profit guidance Insurance Australia Group expects to beat its previous profit guidance, after benefiting from relatively few claims from natural disasters in the last six months. The insurer today said its profit margins would be between 16.8 per cent and 17.2 per cent for the financial year that recently finished, significantly higher than previous guidance of 12.5 to 14.5 per cent. Managing director Mike Wilkins said claims from natural disasters were $470 million, compared with its previous assumption they would hit $620 million. In the last six months the natural disaster environment for insurers has been relatively benign, with few major sources of claims aside from ex-Tropical Cyclone Oswald and bushfires in NSW and Tasmania. As well, revenue from premiums had grown more than expected, thanks mainly to the surge in the New Zealand dollar to a five year high against the Australian dollar. IAG makes about a fifth of its revenue in New Zealand - so the high Kiwi dollar boosts total earnings, which are measured in Australian dollars. Compared to our previously held assumptions, these factors have caused the group's insurance margin to exceed our earlier guidance. Meanwhile, the underlying performance of the group has remained strong over the course of the financial year," Mr Wilkins said. Shortly after the market opened IAG shares had risen 1.4 per cent to $5.92. IAG, the group behind the NRMA, RACV and CGU brands, is the nation's biggest insurer of cars and homes. The rise comes after the two major domestic insurers - IAG and Suncorp - enjoyed bumper profit growth when they last reported their results in in February. At the time IAG said home and car premiums could rise 5 to 10 per cent over the next 12 to 18 months, as it passed on the growing cost of meeting claims to customers. But some analysts question whether big insurance companies - which are facing growing competition from ""challenger"" brands included those owned by the supermarkets - will be able to continue propping up profits with higher premiums. IAG said it intended to pay shareholders a dividend of 50 to 70 per cent of earnings, in line with its policy.