The Insurance Australia Group Ltd (ASX: IAG) share price tumbled 6% on Wednesday after the insurer released its 2018 financial results showing a 2.6% increase in revenue to $16.4 billion and a profit of $923 million, down 0.6% year-over-year.

IAG CEO Peter Harmer said the result was “solid” but it appears the market didn’t agree.

This is a solid result for IAG with an encouraging improved underlying performance, in line with our expectations,” Harmer said.

Data from Bell Potter suggests analysts were expecting a profit of $1.086 billion, around $160 million more than what IAG reported.

IAG said fewer natural weather events and a robust insurance profit helped the company achieve its result.

We’ve met the guidance we provided last year, slightly exceeding the reported margin component thanks to favourable natural perils and higher reserve releases than anticipated,” Harmer added.

Going forward IAG said its ability to pay fully franked dividends may be hampered by its falling franking account balance.

However, if IAG is successful with its upcoming shareholder vote, investors could expect a return of capital of 25 cents per share, which would be in addition to the dividends already declared.

“We have long maintained the best place for surplus capital is with our shareholders in the absence of significant operational demands for capital,” Harmer noted.