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Insurance Australia Group Limited
(Sydney:IAG)
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Rating:72Outperform
Price Target:
AU$9.00
▲(20.48% Upside)
Action:Upgraded
Date:03/26/26
The score is driven primarily by solid financial performance (strong cash generation and a stable capital structure) and a supportive earnings outlook with maintained guidance, buyback, and improving operating metrics. Valuation is a clear positive due to the low P/E and healthy dividend yield. Technicals are moderately constructive but tempered by a stretched short-term stochastic reading and price still below the 200-day average.
Positive Factors
Free Cash Flow Growth
A 31.26% rise in free cash flow indicates stronger, durable cash generation capacity. This improves the firm's ability to self-fund capital uses (dividends, buybacks, RACQ integration), absorb claim volatility, and reduce reliance on external financing over the medium term.
Negative Factors
Revenue Decline
A 12.27% revenue decline weakens scale and can compress operating leverage, exacerbating margin pressure. Coupled with inconsistent ROE and low net margins, slower top‑line recovery risks prolonged earnings volatility and limits reinvestment capacity over several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Growth
A 31.26% rise in free cash flow indicates stronger, durable cash generation capacity. This improves the firm's ability to self-fund capital uses (dividends, buybacks, RACQ integration), absorb claim volatility, and reduce reliance on external financing over the medium term.
Read all positive factors
Insurance Australia Group Limited (IAG) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$19.22B
Dividend Yield3.91%
Average Volume (3M)5.86M
Price to Earnings (P/E)17.5
Beta (1Y)0.10
Revenue Growth8.36%
EPS Growth-13.93%
CountryAU
Employees13,650
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.46
Shares Outstanding2,337,953,000
10 Day Avg. Volume6,423,780
30 Day Avg. Volume5,862,566
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)2.91
Price to Sales (P/S)1.45
P/FCF Ratio15.79
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$8.33Price Target Upside11.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.48
Revenue Forecast (FY)AU$19.19B
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 primarily makes money through (1) insurance underwriting income and (2) investment income on funds it holds. Underwriting income is generated by collecting premiums from policyholders in exchange for taking on insured risks, then managing the ...
Insurance Australia Group Limited Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Positive
The call conveys a confident, constructive tone: management highlighted strong underlying profitability (underlying profit $804m, 15.1% margin), robust capital position (CET1 above target), successful reinsurance protections, expense and claims ratio improvements, and a path to realize RACQ synergies. These positives are tempered by material weather-related losses (notably RACQ/Queensland perils), short-term drag from RACQ integration and reinsurance unwind, weaker investment yields H1, and softness in some New Zealand and motor markets. Management retained FY'26 guidance, announced a $200m buyback, and expects stronger H2 growth, indicating overall resilience and recovery momentum.Positive Updates
Strong Profit and Capital Generation
Reported NPAT of over $500 million for the half; underlying insurance profit of $804 million (15.1% underlying margin). CET1 capital finished the half above target range and management funded the RACQ acquisition from organic capital while announcing an on‑market buyback of up to $200 million.
Negative Updates
Severe Weather and RACQ Perils Impact
Multiple severe weather events (hail, bushfire, flooding, NZ landslide) materially affected results. RACQ portfolio saw over $800 million gross peril claims (~$224 million net), $152 million above its $72 million allowance, and substantially weighed on reported and underlying margins in H1.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Profit and Capital Generation
Reported NPAT of over $500 million for the half; underlying insurance profit of $804 million (15.1% underlying margin). CET1 capital finished the half above target range and management funded the RACQ acquisition from organic capital while announcing an on‑market buyback of up to $200 million.
Read all positive updates
Company Guidance
IAG reiterated FY‑26 guidance, maintaining an insurance profit range of $1,550–$1,750m (targeting a ~15% reported insurance margin / through‑the‑cycle ROE) and forecasting top‑line premium growth in the high single digits for the year with double‑digit growth expected in 2H (including ~9% 2H contribution from RACQ); management also announced an on‑market buyback of up to $200m. Key metrics underpinning the guidance include underlying insurance profit of $804m (15.1% underlying margin), reported margin 13.5% (17.7% excluding RACQ), NPAT of over $500m, an interim dividend of $0.12 per share (56% payout), a revised payroll/perils allowance of $1,465m, an increase in whole‑of‑account quota share to 35%, non‑quota reinsurance costs of $676m (+8% H‑on‑H, $60m related to RACQ), profit commission accruals of ~ $115m (vs ~$40m 1H25), an underlying claims ratio of 51.9% (improved 70bps; +120bps excluding RACQ), admin expense ratio improvement of 20bps ex‑levies (aiming for <11% in FY27), underlying investment yield ~4.6% (exit yield ~5%), shareholders’ funds income $186m, and expected annualized RACQ synergies of at least $50m; RACQ experienced >$800m gross peril claims ($224m net, $152m above its $72m allowance) and a stop‑loss recovery of ~$137m was accrued at the half‑year.Insurance Australia Group Limited Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.53B | 14.76B | 15.99B | 409.00M | 7.57B | 7.88B |
| Gross Profit | 16.03B | 15.06B | 15.99B | 8.93B | 7.57B | 7.88B |
| EBITDA | 2.06B | 2.63B | 1.88B | 1.69B | 779.00M | -67.00M |
| Net Income | 1.09B | 1.36B | 898.00M | 832.00M | 347.00M | -427.00M |
Balance Sheet | ||||||
| Total Assets | 27.65B | 26.31B | 25.62B | 35.03B | 34.16B | 33.46B |
| Cash, Cash Equivalents and Short-Term Investments | 571.00M | 703.00M | 631.00M | 1.35B | 938.00M | 2.00B |
| Total Debt | 3.64B | 2.96B | 2.94B | 2.64B | 2.58B | 2.57B |
| Total Liabilities | 19.83B | 18.52B | 18.50B | 27.98B | 27.66B | 26.90B |
| Stockholders Equity | 7.30B | 7.33B | 6.66B | 6.65B | 6.16B | 6.25B |
Cash Flow | ||||||
| Free Cash Flow | 1.03B | 1.35B | 1.16B | 452.00M | -526.00M | -799.00M |
| Operating Cash Flow | 1.06B | 1.35B | 1.80B | 452.00M | 900.00M | 1.61B |
| Investing Cash Flow | -762.00M | 38.00M | -628.00M | 394.00M | -1.46B | -2.42B |
| Financing Cash Flow | -602.00M | -982.00M | -682.00M | -437.00M | -527.00M | 516.00M |
Insurance Australia Group Limited Technical Analysis
Positive
7.47
Price Trends
7.85
Positive
7.48
Positive
7.59
Positive
Market Momentum
0.10
Positive
58.02
Neutral
68.94
Neutral
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 7.47 is below the 20-day moving average (MA) of 8.07, below the 50-day MA of 7.85, and below the 200-day MA of 7.59, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 58.02 is Neutral, neither overbought nor oversold. The STOCH value of 68.94 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | AU$37.95B | 12.24 | 19.29% | 4.68% | 8.05% | 25.40% | |
73 Outperform | AU$20.11B | 20.48 | 9.55% | 26.88% | 6.10% | -29.98% | |
72 Outperform | AU$19.22B | 17.52 | 14.85% | 3.91% | 8.36% | -13.93% | |
69 Neutral | AU$13.91B | 29.83 | 19.79% | 3.73% | 5.81% | -5.34% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | AU$5.71B | 16.09 | 15.06% | 3.70% | 11.53% | 51.82% | |
60 Neutral | AU$3.71B | 17.51 | 11.69% | 2.95% | 11.02% | 62.95% |
* Financial Sector Average
AU:IAG
Insurance Australia Group Limited
8.21
0.08
0.98%
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Insurance Australia Group Limited Corporate Events
IAG reports lapse of performance and award rights
Jul 9, 2026
Insurance Australia Group Limited has reported the lapse of 138,160 performance rights and 29,140 award rights, after conditions attached to these securities were not met or became incapable of being satisfied. The cessation of these rights slight...
IAG Issues New Unquoted Equity Under Employee Incentive Schemes
Jul 6, 2026
Insurance Australia Group Limited has notified the ASX of the issue of new unquoted equity securities under its employee incentive schemes. The company is granting 153,690 performance rights and 32,240 award rights, which are subject to transfer r...
IAG Issues New Tranche of Unquoted Performance Rights Under Employee Scheme
Jun 5, 2026
Insurance Australia Group Limited has issued 162,960 unquoted performance rights under its employee incentive scheme, as notified in an Appendix 3G filing to the ASX. These performance rights are subject to transfer restrictions and will not be qu...
IAG settles A$4bn Greensill Bank lawsuit with limited financial impact
May 28, 2026
Insurance Australia Limited, a subsidiary of Insurance Australia Group, has agreed to settle Federal Court proceedings brought by Greensill Bank AG and its insolvency administrator over trade credit insurance policies linked to Greensill entities....
IAG Targets $25bn Premiums and Double-Digit Returns Under Ambition 2030
May 11, 2026
Insurance Australia Group has unveiled a refreshed Ambition 2030 strategy, targeting more than 11 million customers and over $25 billion in gross written premium by 2030, while reinforcing its position as a leading insurer in Australia and New Zea...
IAG Continues On-Market Share Buy-Back Program
May 11, 2026
Insurance Australia Group Limited has updated the market on its ongoing on-market share buy-back program involving its ordinary fully paid shares. The company reported that it had repurchased a cumulative 25,272,259 shares prior to the latest repo...
IAG Updates Market on Progress of Daily Share Buy-Back
May 10, 2026
Insurance Australia Group Limited has provided an updated notification on its ongoing on-market share buy-back of ordinary fully paid shares. The filing records that a total of 23,761,761 shares had been repurchased before the previous trading day...
IAG updates market on progress of on‑market share buy‑back
May 8, 2026
Insurance Australia Group Limited has reported the latest activity under its on-market share buy-back program, confirming that it repurchased 1,418,298 ordinary fully paid shares on the previous trading day. This lifts the cumulative total bought ...
IAG Updates Market on Progress of On‑Market Share Buy‑Back
May 6, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX regarding its ongoing on‑market share buy‑back of ordinary fully paid shares. The latest filing confirms the program’s continuation, with a total o...
IAG Updates Market on Progress of On-Market Share Buyback
May 5, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buyback program for ordinary fully paid shares. The filing reports that the company had repurchased a total of 20,116,328 share...
IAG Updates Market on Progress of On-Market Share Buy-Back
May 3, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for its ordinary fully paid shares. The announcement records that a total of 19,170,469 shares had been repurc...
Insurance Australia Group Updates Market on Ongoing Share Buy‑Back Activity
Apr 30, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX on its ongoing on‑market share buy‑back program for its ordinary fully paid shares. The filing, dated 30 April 2026, confirms that the company is continu...
IAG Updates Market on Progress of Ongoing On-Market Share Buy-Back
Apr 29, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for its ordinary fully paid shares. The update confirms that, as of 29 April 2026, the company has repurchased...
IAG Updates Market on Progress of Ongoing Share Buy-Back
Apr 23, 2026
Insurance Australia Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for its ordinary fully paid shares. The latest filing, dated 24 April 2026, confirms that the company repurcha...
IAG Reports Daily Progress on Ongoing On-Market Share Buy-Back
Apr 22, 2026
Insurance Australia Group Limited has provided an update on its ongoing on-market share buy-back program for its ordinary fully paid shares. The company reported that a total of 15,090,253 shares had been repurchased prior to the previous trading ...
ACCC Escalates Review of IAG–RAC Insurance Alliance to Phase 2
Apr 16, 2026
Insurance Australia Group (IAG) has acknowledged that the Australian Competition and Consumer Commission will move to a Phase 2 assessment of its proposed alliance with the Royal Automobile Club of Western Australia. The alliance is intended to pr...
IAG Issues 31,930 New Shares on Conversion of Unquoted Equity Securities
Apr 15, 2026
Insurance Australia Group Limited has notified the market of the issue of 31,930 ordinary fully paid shares following the conversion or exercise of unquoted equity securities. The new shares, issued on 13 March 2026 under ASX code IAG, represent a...
IAG trims share count via buy-back and lapsing equity rights
Apr 13, 2026
Insurance Australia Group Limited has reduced its ordinary share capital through the cancellation of 15,090,253 fully paid ordinary shares following completion of an on-market buy-back. The move decreases the number of IAG shares on issue, which c...
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.