Insurance Australia Group Limited (NRM) Q4 2026 Earnings Report

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.

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.