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Insurance Australia Group Limited
(Sydney:IAG)
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Rating:62Neutral
Price Target:
AU$9.50
▲(22.27% Upside)
Action:Downgraded
Date:08/17/26
Overall score reflects improved profitability and a solid balance sheet, plus supportive FY27 guidance and capital return commentary from the earnings call. Offsetting these positives are inconsistent cash generation (including zero free cash flow in 2026) and a mixed near-term technical picture with negative momentum indicators.
Positive Factors
Premium Growth and Scale
Premium growth across IAG’s core retail businesses indicates continued customer demand and distribution strength. Expanding scale supports investment in claims capability, technology and pricing, while a larger portfolio can improve operating leverage and reinforce the company’s competitive position.
Negative Factors
Natural Perils Volatility
Large weather events can create material swings in underwriting results despite disciplined pricing and reinsurance. Repeated catastrophe volatility may pressure margins, increase capital needs and make earnings less predictable over the next several reporting periods.
Read all positive and negative factors
Positive Factors
Negative Factors
Premium Growth and Scale
Premium growth across IAG’s core retail businesses indicates continued customer demand and distribution strength. Expanding scale supports investment in claims capability, technology and pricing, while a larger portfolio can improve operating leverage and reinforce the company’s competitive position.
Read all positive factors
Insurance Australia Group Limited (IAG) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$20.80B
Dividend Yield3.6%
Average Volume (3M)4.47M
Price to Earnings (P/E)20.5
Beta (1Y)0.11
Revenue Growth9.36%
EPS Growth-24.51%
CountryAU
Employees11,999
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.43
Shares Outstanding2,339,209,200
10 Day Avg. Volume4,348,832
30 Day Avg. Volume4,472,713
Financial Highlights & Ratios
PEG Ratio-0.77
Price to Book (P/B)2.63
Price to Sales (P/S)0.98
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$8.65Price Target Upside11.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.47
Revenue Forecast (FY)AU$19.29B
Insurance Australia Group Limited Business Overview & Revenue Model
Company Description
Insurance Australia Group Limited (IAG), headquartered in Sydney, Australia, is a prominent provider of general insurance underwriting and investment management services across Australia and New Zealand. The company offers a comprehensive array of...
How the Company Makes Money
IAG makes money primarily by underwriting general insurance. Customers pay premiums for policies (e.g., motor, home, and business insurance), and IAG recognizes insurance revenue over the period it provides coverage. Profitability depends on prici...
Insurance Australia Group Limited Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 12, 2027
Earnings Call Sentiment Positive
The call presents clear positive momentum: top‑line growth (7.6% GWP), rising underlying profit (+2.3% to ~$1.58bn), improved claims and expense efficiency, strong capital returns (dividend increase, $200m buyback) and accelerated AI/tech adoption. These strengths largely offset material near‑term headwinds from natural perils, elevated home claims inflation (~15%), higher non‑quota reinsurance costs, and weakness in intermediated New Zealand and some bank/partner channels. Management’s FY27 guidance (5–8% premium growth, reported insurance margin 14.5–16.5%) and resilience of the reinsurance/perils program support a constructive outlook.Positive Updates
Premium Growth and Scale
Group gross written premiums up 7.6% to $18.4bn (includes 10-month RACQ contribution of $1.3bn). On an underlying basis premiums grew ~2%. Direct retail businesses in Australia and New Zealand grew around 5% and combined delivered ~7% growth in the final quarter.
Negative Updates
Perils Impact and First‑Half Volatility
Severe perils affected first half results: RACQ severe perils experience left the year $114m above the net peril allowance (primarily first‑half), and Victorian bushfires drove a $71m perils impact within intermediated Australia. While H2 finished $38m below allowance, perils created significant first‑half volatility.
Read all updates
Q4-2026 Updates
Positive
Negative
Premium Growth and Scale
Group gross written premiums up 7.6% to $18.4bn (includes 10-month RACQ contribution of $1.3bn). On an underlying basis premiums grew ~2%. Direct retail businesses in Australia and New Zealand grew around 5% and combined delivered ~7% growth in the final quarter.
Read all positive updates
Company Guidance
IAG guided FY‑27 premiums growth of 5–8% (backed by mid‑single‑digit underlying retail growth and low‑single‑digit intermediated growth, plus a full year of RACQ and potential RAC Insurance/WA upside), with a reported insurance margin target of 14.5–16.5% (mid‑point ~15.5%), a perils allowance up just 2% to $1.49bn and modeled long‑term perils protection that leaves an average net perils upside of >$100m (≈$200m in a favourable year); management expects the admin expense ratio (ex‑levies) to fall below 11% in FY‑27, ongoing claims benefits of ~ $350m p.a., an underlying claims ratio around 51% (H2 51.2%), a CET1 multiple roughly 1.14x pre‑dividend (≈0.98x after the $0.20 final dividend), a continued capital return capability (FY‑26 full‑year dividend $0.32, payout 73%, final $0.20 franking 80%, FY‑27 expected franking 80–100%), and to deliver ROE ≥15% with high‑single‑digit EPS growth.Insurance Australia Group Limited Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
74
Positive
Cash Flow
52
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 19.36B | 14.76B | 15.99B | 409.00M | 7.57B |
| Gross Profit | 3.64B | 15.06B | 15.99B | 8.93B | 7.57B |
| EBITDA | 2.16B | 2.63B | 1.88B | 1.69B | 779.00M |
| Net Income | 1.02B | 1.36B | 898.00M | 832.00M | 347.00M |
Balance Sheet | |||||
| Total Assets | 27.60B | 26.31B | 25.62B | 35.03B | 34.16B |
| Cash, Cash Equivalents and Short-Term Investments | 2.05B | 703.00M | 631.00M | 1.35B | 938.00M |
| Total Debt | 3.24B | 2.96B | 2.94B | 2.64B | 2.58B |
| Total Liabilities | 19.75B | 18.52B | 18.50B | 27.98B | 27.66B |
| Stockholders Equity | 7.23B | 7.33B | 6.66B | 6.65B | 6.16B |
Cash Flow | |||||
| Free Cash Flow | 0.00 | 1.35B | 1.16B | 452.00M | -526.00M |
| Operating Cash Flow | 1.04B | 1.35B | 1.80B | 452.00M | 900.00M |
| Investing Cash Flow | -352.00M | 38.00M | -628.00M | 394.00M | -1.46B |
| Financing Cash Flow | -843.00M | -982.00M | -682.00M | -437.00M | -527.00M |
Insurance Australia Group Limited Technical Analysis
Positive
7.77
Price Trends
8.07
Positive
8.05
Positive
7.59
Positive
Market Momentum
0.24
Negative
72.58
Negative
97.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:IAG, the sentiment is Positive. The current price of 7.77 is below the 20-day moving average (MA) of 8.28, below the 50-day MA of 8.07, and above the 200-day MA of 7.59, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 72.58 is Negative, neither overbought nor oversold. The STOCH value of 97.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:IAG.
Insurance Australia Group Limited Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | AU$39.12B | 12.65 | 18.63% | 4.24% | 3.37% | 6.40% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | AU$3.85B | 37.35 | 5.61% | 3.33% | 5.84% | -49.20% | |
66 Neutral | AU$13.91B | 21.85 | 26.74% | 3.80% | 9.29% | 27.49% | |
65 Neutral | AU$6.44B | 24.17 | 11.48% | 3.61% | 16.76% | -19.90% | |
65 Neutral | AU$21.20B | 20.96 | 10.06% | 3.31% | -2.94% | -31.48% | |
62 Neutral | AU$20.80B | 20.50 | 14.06% | 3.60% | 9.36% | -24.51% |
* Financial Sector Average
AU:IAG
Insurance Australia Group Limited
8.81
0.98
12.46%
AU:AUB
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29.30
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-20.28%
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Medibank Private
5.05
0.35
7.47%
AU:QBE
QBE Insurance Group Limited
26.03
6.62
34.11%
AU:SDF
Steadfast Group Limited
5.80
-0.56
-8.86%
AU:SUN
Suncorp Group
20.15
0.81
4.19%
Insurance Australia Group Limited Corporate Events
IAG shareholders back board, pay and takeover protections at 2026 AGM
Oct 22, 2026
Insurance Australia Group Limited shareholders endorsed all resolutions at the insurer’s 2026 annual general meeting, underscoring strong support for the board and executive leadership. The re-election of non-executive directors Simon Allen ...
IAG Issues New Shares Following Conversion of Unquoted Securities
Oct 6, 2026
Insurance Australia Group Limited has notified the market of the issue of additional ordinary fully paid shares following the conversion or exercise of unquoted securities. The company will issue a total of 4,352,037 new shares on 31 August 2026 a...
IAG Confirms Lapse of Conditional Award Rights
Oct 2, 2026
Insurance Australia Group Limited, a leading general insurer in Australia listed on the ASX, offers insurance products to retail and business customers and uses equity-based awards as part of its remuneration framework. The group actively manages ...
IAG Seeks ASX Quotation for Over 1.25 Million New Shares From Employee Scheme
Sep 28, 2026
Insurance Australia Group Limited has applied for quotation on the ASX of 1,256,265 new ordinary fully paid shares, to be issued on September 28, 2026. These shares arise from an employee incentive scheme and will rank as quoted securities, reflec...
IAG Subsidiary Settles Credit Suisse Greensill Litigation With Limited Financial Impact
Sep 24, 2026
Insurance Australia Limited, a subsidiary of Insurance Australia Group, has agreed to settle Federal Court proceedings brought by Credit Suisse entities over trade credit policies linked to Greensill. The settlement, whose terms are confidential, ...
IAG Sets December Quarterly Distribution on Hybrid Capital Notes
Sep 24, 2026
Insurance Australia Group Limited has announced a quarterly distribution to holders of its ASX-listed capital notes, IAGPF, which are perpetual, non-cumulative, redeemable instruments. The distribution, calculated with reference to a combined annu...
IAG Sets December Quarterly Distribution on Hybrid Capital Notes
Sep 24, 2026
Insurance Australia Group Limited, a leading ASX-listed general insurer operating across Australia and New Zealand, supplements its traditional insurance franchise with hybrid capital instruments such as perpetual, non-cumulative capital notes. Th...
IAG pursues public benefits case after ACCC flags concerns over RAC alliance
Sep 23, 2026
Insurance Australia Group Limited has acknowledged the Australian Competition and Consumer Commission’s Phase 2 decision that its proposed alliance with the Royal Automobile Club of Western Australia should not proceed on competition grounds...
ACCC Blocks IAG’s Bid for RAC Insurance Over Competition Concerns
Sep 23, 2026
Insurance Australia Group’s plan to acquire RAC Insurance has been blocked by the Australian Competition and Consumer Commission, which found the deal would substantially lessen competition in Western Australia’s motor and home and con...
IAG plays down financial impact of unresolved Credit Suisse trade credit case
Sep 20, 2026
Insurance Australia Group Limited, a leading general insurer in Australia and New Zealand, underwrites over $18 billion of annual premiums through brands including NRMA Insurance, CGU, WFI, NZI, State, AMI and Lumley. The company serves personal, ...
IAG to Tender for New External Auditor, Ending Long KPMG Tenure
Sep 18, 2026
Insurance Australia Group Limited (IAG), a leading general insurance provider in Australia and New Zealand, underwrites more than $18 billion in premiums each year through well-known brands including NRMA Insurance, RACV, RACQI, CGU, WFI, NZI, Sta...
IAG releases 2026 AGM notice and shareholder materials
Sep 18, 2026
Insurance Australia Group Limited has released its 2026 Notice of Annual General Meeting, along with the associated Proxy Voting Form, Access Notice and Online Meeting Guide for shareholders. The documentation, authorised by the Group Company Secr...
IAG Converts Unquoted Securities Into New Ordinary Shares
Aug 25, 2026
Insurance Australia Group Limited has notified the ASX of the issue and transfer of unquoted equity securities that have been converted into ordinary fully paid shares. The conversion relates to previously unquoted options or other convertible ins...
IAG Director Nicholas Hawkins Boosts Shareholding Through Equity Incentive Conversions
Aug 23, 2026
Insurance Australia Group Limited has disclosed a significant change in the shareholding of director Nicholas Hawkins following the exercise of deferred award rights and executive performance rights. Hawkins acquired 728,340 fully paid ordinary sh...
IAG Sets Quarterly Distribution on ASX-Listed Capital Notes
Aug 13, 2026
Insurance Australia Group Limited has declared a quarterly distribution on its ASX-listed capital notes (IAGPE), set at AUD 1.4953 per note, reflecting a post-franking adjusted annual distribution rate of 5.9326% based on a reference rate of 4.466...
IAG Files 2026 Corporate Governance Statement and Appendix 4G with ASX
Aug 13, 2026
Insurance Australia Group Limited has lodged its Appendix 4G and 2026 Corporate Governance Statement with the ASX, complying with listing rules that require detailed disclosure of its governance practices for the financial year ended 30 June 2026....
IAG Issues FY26 Results with Extensive Risk and Forward‑Looking Disclaimers
Aug 13, 2026
Insurance Australia Group Limited has released its financial results for the year ended 30 June 2026, presenting both statutory and non‑IFRS financial information prepared under Australian and international accounting standards. The company ...
IAG lifts revenue but profit drops as DRP suspended and cash dividend raised
Aug 13, 2026
Insurance Australia Group Limited reported a 15.1% rise in revenue from ordinary activities to $21.3 billion for the year ended 30 June 2026, but net profit attributable to shareholders fell 24.8% to $1.02 billion compared with the prior year. The...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.