Insurance Australia Group says it's on track to deliver on its fiscal 2010 guidance after enjoying improved conditions in the first quarter.
Managing director Michael Wilkins said if the positive operating conditions continue, the group expects to report an annual insurance margin towards the upper end of its nine per cent to 11 per cent guidance range.
IAG shares jumped 13 cents, or 3.5 per cent, to $3.83 in early trade.
Speaking at a market strategy briefing, Mr Wilkins said he was pleased with the group's progress to date.
"In the first quarter, we've seen the underlying performance of the business continue to improve and we've had the added benefit of narrowing credit spreads," he said on Friday.
Mr Wilkins reiterated the insurer's guidance for underlying gross written premium growth of three per cent to five per cent for the year, while cautioning that reported premium was likely to be impacted the strong Australian dollar exchange rate.
The group's improved underlying performance was being driven by higher premiums, including the earned effect of rate rises implemented in fiscal 2009, full benefit of operating efficiencies in Australia and ongoing cost control, and improved performance for CGU and New Zealand and reduced exposure to the underperforming UK private motor market.
It has also been assisted by a further narrowing in credit spreads since June 30.
IAG will hold its annual general meeting in Sydney on November 10.
AAP
