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AU Financial Review
an hour ago
- Business
- AU Financial Review
Insurance and extreme weather: a test of national resilience
The insurance sector plays a pivotal role, acting as a shock absorber by helping individuals and businesses manage the rising costs and impact of weather-related risks. But we must address growing pressures on the sector to ensure a sustainable future. Figures bear this out. Since 2020, Australia has experienced 14 declared catastrophes and eight significant weather events, resulting in $22.5 billion paid out in insured costs over the last five years. This represents a staggering 67 per cent increase compared to the previous five years. Last year alone, general insurers in Australia wrote 86 million policies and paid out around $50 billion in claims, with more than $22 billion directed to everyday Australians for motor and home claims. As insurance costs rise, the implications for national economic confidence are significant if we don't act together. These figures represent the reality that without a robust insurance sector, businesses cannot expand, banks hesitate to lend, and our society faces economic decline. There will be further social imbalance. Threat to most vulnerable The rising cost of weather-related events and the resulting pressure on supply chains and increase in the cost of reinsurance – are key drivers of the rise in premiums for customers. These escalating costs are putting pressure on insurance affordability and availability, especially in high-risk areas. There's a real risk that insurance will become inaccessible for those who need it most. Unfortunately, the most vulnerable often bear the brunt of climate volatility owing to their locations, and without adequate insurance, their ability to recover from disasters is severely compromised. Against this backdrop, we must continue to advocate for a range of solutions to stop this from happening. Accelerated investment in flood mitigation, preventing housing development on floodplains and ensuring that new homes are built to withstand severe weather are all critical steps. The role of global reinsurance markets also cannot be overlooked. Deep access to global capital pools is essential for managing the growing risks associated with extreme weather. Australia is well positioned in this regard, including at IAG. Reinsurers' role Reinsurers provide the capital and risk-sharing mechanisms that allow local insurers to offer comprehensive coverage to all Australians. This interconnectedness underscores the importance of a strong insurance sector that can withstand local and global uncertainties. In the wake of recent severe weather, the insurance industry has been under scrutiny, and rightly so. The federal government's inquiry into the industry's response to the 2022 floods highlighted the need for improvement in how we prepare for and respond to severe weather. At IAG, Australia's largest general insurer, we've reviewed the way we prepare for and respond to severe weather and have made significant improvements to boost available resources, reduce claims handling times, better identify vulnerable customers, and be clearer in how we communicate with our customers. But there is still work to be done. Trust is paramount, and we must continue to evolve to meet the needs of customers and communities. To solve the challenges of the next 50 years, we must innovate and evolve for the long-term sustainability of the insurance sector and for every Australian family and business that depends on us. Insurance has always been about protection and will continue to be. But it must also be about leadership and foresight. It's all about being one step ahead of the risks, not one step behind. For decades, the insurance sector has built strong foundations, alongside government and other stakeholders. The challenge for all of us is to seize this opportunity to make sure we can continue to provide the safety and security Australians have come to depend on so they can thrive in good times and bad.
AU Financial Review
5 hours ago
- Business
- AU Financial Review
Analysts see more upside for insurance giants after FY25's stellar run
As investors navigated a turbulent 2025 financial year, two insurance giants climbed the wall of worry to deliver double-digit returns: IAG and QBE. IAG, behind the NRMA Insurance brand, delivered 33 per cent total return, while QBE, which operates in 27 countries, gained 44 per cent. Both outperformed the S&P/ASX 200's 15 per cent return.
Los Angeles Times
14 hours ago
- Business
- Los Angeles Times
Airlines face climate reality check with green jet fuel
British Airways' parent company, International Airlines Group, surged ahead of other passenger airlines last year to consume the most sustainable aviation fuel, according to a Bloomberg Green review of corporate filings from dozens of air carriers. The company acquired 55 million gallons of cleaner jet fuel, which is derived from lower-emitting sources such as used cooking oil and animal tallow. That number exceeded the amount used by all U.S. passenger airlines combined. But the promising performance is overshadowed by a troubling reality for the industry: The shift to sustainable aviation fuel is still minuscule, while growth in passenger air travel is drowning out any climate gains so far. For example, despite IAG's world-leading status, cleaner fuel accounted for only about 1.9% of its overall fuel consumption last year, and its emissions from fuel combustion still rose by 5%. Globally, sustainable aviation fuel is expected to increase to 0.7% from 0.3% of aviation fuel this year. But the International Air Transport Assn. expects air travel to climb 6%, causing another jump in emissions. 'We're still at the very beginning of this market,' said Daisy Robinson, a BloombergNEF analyst who focuses on renewable fuels. 'It's going to take some time.' New rules are springing up in different parts of the world to spur more use of sustainable aviation fuel, which costs at least twice as much as conventional jet fuel. Starting this year, the European Union and the U.K. require jet fuel to include at least 2% SAF. Other requirements have been enacted or planned in Canada's British Columbia province, Brazil, Indonesia and Singapore. Such rules help protect first movers from being undercut on prices by competitors. 'As airlines, because of competition, we're not great at doing this voluntarily,' said Aaron Robinson, IAG's vice president for sustainable aviation fuels in the U.S. 'Mandates in different geographies can play a really important role in moving the whole aviation industry forward.' In the U.S., where no mandates are planned and where President Trump's recent tax bill reduced incentives for SAF, airlines have fallen behind the market leaders — despite some heavily advertising their pursuit of greener fuels. Alaska Air Group Inc. leaped to the front of U.S. carriers last year by increasing its SAF usage more than tenfold to 0.68% of its fuel. That's about double the percentage of several other big U.S. airlines, including JetBlue Airways Corp., United Airlines Holdings Inc. and Delta Air Lines Inc. It's nearly 10 times the percentage of American Airlines Group Inc., which used only 0.07% SAF. (When including cargo carriers, DHL Group led the world by using SAF for 3.52% of its jet fuel last year.) Businesses that spend a lot on corporate travel, such as tech firms and consulting companies, helped pay for more than half of Alaska's SAF last year. This enables companies such as Microsoft Corp. and Autodesk Inc. to claim a smaller carbon footprint. Microsoft shaved its emissions by 65,000 tons last year by helping cover the cost of greener fuels, including for some employee flights on Alaska. It's unclear, though, how many more companies will step up, especially given the high cost of cleaner jet fuel compared with other options to rein in emissions. Ryan Spies, managing director of sustainability for Alaska, estimates that businesses pay $150 to $300 for each ton of carbon dioxide that they avoid through SAF purchases. By comparison, carbon offsets sold for an average of about $6.30 per ton last year, according to Ecosystem Marketplace — though many offset projects have delivered fewer climate benefits than advertised. 'This pool might not be that deep,' Spies said. 'The only way to bring these [cost] numbers down is to invest in these technologies.' Global SAF production continues to lurch forward at an uneven clip. Although analysts say there's plenty of green fuel to hit the 2% mandates in Europe this year, vastly more will be needed for airlines to reach their widely held goals of 10% SAF by 2030. A couple of new plants began churning out cleaner fuels last year, including a large Texas facility from Diamond Green Diesel, which is a joint venture between Valero Energy Corp. and Darling Ingredients Inc. Meanwhile, World Energy's first-in-the-country SAF plant in Paramount, has been shut down for months after the loss of financial backing from Air Products & Chemicals Inc. A World Energy spokesperson said there's no timetable for restarting the plant. Perhaps the biggest disappointment for airlines has been the retreat of oil giants, which previously trumpeted massive commitments in this area. BP, for instance, said two years ago that it was pursuing five projects around the world that would produce 50,000 barrels of renewable fuels per day, with a focus on SAF. The oil major has since scaled back most of these plans amid a renewed focus on fossil fuels. BP didn't respond to requests for comment. 'We need to make sure that some of these bigger players are really investing in the new facilities,' said Hemant Mistry, director of net zero transition for the International Air Transport Assn. 'They're the ones who have the technical expertise, the experience, and they have the balance sheets, as well.' Passenger air travel is expected to double by 2050, which will probably cause emissions to soar. While airlines are counting heavily on cleaner fuels to save the day — IATA anticipates SAF could be 80% to 90% of the fuel supply by mid-century — others are more pessimistic. BloombergNEF, for instance, predicts that scarce feedstocks and a lack of new plants will limit these cleaner fuels to about 7% of the industry's propellant by 2050. Considering these challenges, some in the industry are pushing it to shift its focus beyond SAF and to address the thorny issue of ever-rising passenger numbers. 'Limiting or even questioning growth, that is difficult for airlines,' said Karel Bockstael, a former vice president of sustainability at KLM Royal Dutch Airlines, who retired in 2022 after 32 years at the company. Bockstael last year co-founded the group Call Aviation to Action, which has the support of more than 400 current and former aviation insiders, including from fuel producers, airports and airlines. They're urging the industry to set firm limits for its emissions and to support more aggressive policies to stay within these boundaries. This could include levies on frequent fliers or carbon taxes on jet fuel. 'We're not against the industry, we love it, we know all the benefits of it,' Bockstael said. 'But if we do not have a strategy — if we do not have a way out when planetary boundaries are forced upon us — then we will have serious problems, and our industry will have a tragic hard landing.' Elgin writes for Bloomberg.
Mint
2 days ago
- Business
- Mint
Airlines Trying to Reduce Emissions With Green Jet Fuel Face Reality Check
(Bloomberg) -- British Airways' parent company IAG SA surged ahead of other passenger airlines last year to consume the most sustainable aviation fuel, or SAF, according to a Bloomberg Green review of corporate filings from dozens of air carriers. The company acquired 55 million gallons of cleaner jet fuel, which is derived from lower-emitting sources such as used cooking oil and animal tallow. That number exceeded the amount used by all US passenger airlines combined. But the promising performance is overshadowed by a troubling reality for the industry: The shift to SAF is still minuscule, while growth in passenger air travel is drowning out any climate gains so far. For example, despite IAG's world-leading status, cleaner fuel accounted for only about 1.9% of its overall fuel consumption last year, and its emissions from fuel combustion still rose by 5%. Globally, SAF is expected to increase to 0.7% from 0.3% of aviation fuel this year. But the International Air Transport Association expects air travel to climb 6%, causing another jump in emissions. 'We're still at the very beginning of this market,' said Daisy Robinson, a BloombergNEF analyst who focuses on renewable fuels. 'It's going to take some time.' New rules are springing up in different parts of the world to spur more use of SAF, which costs at least twice as much as conventional jet fuel. Starting this year, the European Union and the UK require jet fuel to include at least 2% SAF. Other requirements have been enacted or planned in British Columbia, Brazil, Indonesia and Singapore. Such rules help protect first movers from being undercut on prices by competitors. 'As airlines, because of competition, we're not great at doing this voluntarily,' said Aaron Robinson, IAG's vice president for sustainable aviation fuels in the US. 'Mandates in different geographies can play a really important role in moving the whole aviation industry forward.' In the US, where no mandates are planned and where President Donald Trump's recent tax bill reduced incentives for SAF, airlines have fallen behind the market leaders (despite some heavily advertising their pursuit of greener fuels). Alaska Air Group Inc. leapt to the front of US carriers last year by increasing its SAF usage more than tenfold to 0.68% of its fuel. That's about double the percentage of several other big US airlines, including JetBlue Airways Corp., United Airlines Holdings Inc. and Delta Air Lines Inc. It's nearly 10 times the percentage of American Airlines Group Inc., which used only 0.07% SAF. (When including cargo carriers, DHL Group led the world by using SAF for 3.52% of its jet fuel last year.) Businesses that spend a lot on corporate travel, such as tech firms and consulting companies, helped pay for more than half of Alaska's SAF last year. This enables companies such as Microsoft Corp. and Autodesk Inc. to claim a smaller carbon footprint. Microsoft shaved its emissions by 65,000 tons last year by helping cover the cost of greener fuels, including for some employee flights on Alaska. It's not clear, though, how many more companies will step up, especially given the high cost of cleaner jet fuel, compared with other options to rein in emissions. Ryan Spies, managing director of sustainability for Alaska, estimates that businesses pay between $150 to $300 for each ton of CO2 that they avoid through SAF purchases. By comparison, carbon offsets sold for an average of about $6.30 per ton last year, according to Ecosystem Marketplace (though many offset projects have delivered fewer climate benefits than advertised). 'This pool might not be that deep,' Spies said. 'The only way to bring these [cost] numbers down is to invest in these technologies.' Global SAF production continues to lurch forward at an uneven clip. While analysts say there's plenty of green fuel to hit the 2% mandates in Europe this year, vastly more will be needed for airlines to reach their widely held goals of 10% SAF by 2030. A couple of new plants began churning out cleaner fuels last year, including a large Texas facility from Diamond Green Diesel, which is a joint venture between Valero Energy Corp. and Darling Ingredients Inc. Meanwhile, World Energy's first-in-the-country SAF plant in Paramount, California, has been shut down for months following the loss of financial backing from Air Products and Chemicals Inc. A World Energy spokesperson said there's no timetable for restarting the plant. Perhaps the biggest disappointment for airlines has been the retreat of oil giants, which previously trumpeted massive commitments in this area. BP Plc, for instance, said two years ago that it was pursuing five projects around the world that would produce 50,000 barrels of renewable fuels per day, with a focus on SAF. The oil major has since scaled back most of these plans amid a renewed focus on fossil fuels. BP didn't respond to requests for comment. 'We need to make sure that some of these bigger players are really investing in the new facilities,' said Hemant Mistry, director of net zero transition for IATA. 'They're the ones who have the technical expertise, the experience, and they have the balance sheets, as well.' Passenger air travel is expected to double by 2050, which will likely cause emissions to soar. While airlines are counting heavily on cleaner fuels to save the day — IATA anticipates SAF could be 80% to 90% of the fuel supply by mid-century — others are more pessimistic. BloombergNEF, for instance, predicts that scarce feedstocks and a lack of new plants will limit these cleaner fuels to about 7% of the industry's propellant by 2050. Considering these challenges, some in the industry are pushing it to shift its focus beyond SAF and to address the thorny issue of ever-rising passenger numbers. 'Limiting or even questioning growth, that is difficult for airlines,' said Karel Bockstael, a former vice president of sustainability at KLM Royal Dutch Airlines, who retired in 2022 after 32 years at the company. Bockstael last year co-founded the group Call Aviation to Action, which has the support of over 400 current and former aviation insiders, including from fuel producers, airports and airlines. They're urging the industry to set firm limits for its emissions and to support more aggressive policies to stay within these boundaries. This could include levies on frequent flyers or carbon taxes on jet fuel. 'We're not against the industry, we love it, we know all the benefits of it,' said Bockstael. 'But if we do not have a strategy — if we do not have a way out when planetary boundaries are forced upon us — then we will have serious problems, and our industry will have a tragic hard landing.' More stories like this are available on
Yahoo
5 days ago
- Business
- Yahoo
GE Aerospace Lifts 2025 Outlook On Soaring Orders, Profits, And Cash Flow
GE Aerospace (NYSE:GE) shares traded higher in Thursday's session after the company reported better-than-expected second-quarter 2025 results. GE posted adjusted revenue of $10.2 billion, up 23% year over year (YoY), and GAAP revenue of $11.02 billion, a 21% increase, both topping the consensus estimate of $9.57 billion. Commercial Engines & Services (CES) revenue was $7.99 billion (+30% YoY), and Defense & Propulsion Technologies revenue totaled $2.56 billion (+7% YoY).For the quarter, GE Aerospace reported $11.7 billion in Commercial Engines & Services orders, up 28%, with services also rising 28%, while Defense & Propulsion Technologies orders climbed 24% year over year to $2.9 billion. Adjusted EPS for the quarter was $1.66 (+38% YoY), beating the consensus of $1.41. GE Aerospace's adjusted operating profit margin contracted 10 bps to 23%, with an adjusted operating profit of 2.34 billion, up 23% YoY in the quarter. GE Aerospace generated $2.3 billion in operating cash and $2.1 billion in free cash flow, up 92% year over year. As of June 30, 2025, cash and cash equivalents stood at $10.86 billion. View more earnings on GE During the quarter, GE Aerospace improved supplier performance using FLIGHT DECK, boosting material input by 10% sequentially and achieving over 95% delivery compliance, driving a 29% rise in CES services revenue and a 45% jump in engine units. It secured record engine deals with Qatar Airways and IAG, completed 350+ CFM RISE tests, and announced major U.S. hypersonics infrastructure upgrades. GE Aerospace Chairman and CEO H. Lawrence Culp, Jr., said the team delivered a strong second quarter, with free cash flow nearly doubling and over 20% growth across orders, revenue, profit, and EPS. 'We are raising our 2025 guidance and 2028 outlook, with our operating performance and robust commercial services outlook underpinning our higher revenue, earnings, and cash growth expectations. Our team is using FLIGHT DECK to improve safety, quality, delivery and cost, always in that order, as we strive to provide unrivaled customer service and deliver on our roughly $175 billion backlog,' he added. 2025 Guidance GE Aerospace now expects adjusted revenue growth in mid-teens (prior low double digits) and adjusted EPS of $5.60 to $5.80 (prior $5.10 to $5.45) vs. the $5.57 consensus. The company expects adjusted operating profit of $8.2 to $8.5 billion (prior $7.8 billion to $8.2 billion) and adjusted Free Cash Flow of $6.5 to $6.9 billion (prior $6.3 billion to $6.8 billion). The company also plans to boost capital returns by 20% to ~$24 billion through 2026 and aims to return at least 70% of free cash flow to shareholders beyond that. GE Aerospace raised its 2028 outlook, targeting ~$11.5 billion in operating profit, ~$8.5 billion in free cash flow with ~100% conversion, and adjusted EPS of ~$8.40. The company expects double-digit revenue growth from 2024 to 2028, reflecting strong execution and long-term confidence. GE Aerospace shares have climbed nearly 60% year to date, reflecting strong market momentum. Price Action: GE shares are trading higher by 2.03% to $271.59 premarket at last check Thursday. Read Next:Photo via Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? GE AEROSPACE (GE): Free Stock Analysis Report This article GE Aerospace Lifts 2025 Outlook On Soaring Orders, Profits, And Cash Flow originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
