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Insurance Australia Group Limited
(Sydney:IAG)
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Rating:72Outperform
Price Target:
AU$9.50
▲(11.11% 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 generation
A 31.26% rise in free cash flow and a strong FCF-to-net-income ratio indicate durable internal cash generation. This strengthens capital flexibility, funds buybacks, organic deals like RACQ, and reinsurance needs without needing significant external financing, supporting resilience over the next months.
Negative Factors
Revenue decline
A 12.27% revenue decline signals pressure on top-line scale and could reflect competitive pricing or lower volumes in key lines. Reduced premium scale can erode operating leverage and constrain margin expansion, making it harder to absorb cost or claims shocks without restoring premium growth or expense cuts.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
A 31.26% rise in free cash flow and a strong FCF-to-net-income ratio indicate durable internal cash generation. This strengthens capital flexibility, funds buybacks, organic deals like RACQ, and reinsurance needs without needing significant external financing, supporting resilience over the next months.
Read all positive factors
Insurance Australia Group Limited (IAG) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$19.03B
Dividend Yield3.74%
Average Volume (3M)5.86M
Price to Earnings (P/E)17.7
Beta (1Y)0.12
Revenue Growth9.36%
EPS Growth-24.51%
CountryAU
Employees13,650
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.43
Shares Outstanding2,337,953,000
10 Day Avg. Volume6,423,780
30 Day Avg. Volume5,862,566
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$8.60Price Target Upside0.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.48
Revenue Forecast (FY)AU$19.17B
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 its general insurance operations by underwriting risk and investing the funds it holds to pay future claims.
1) Insurance underwriting income (premium-based revenue): IAG sells general insurance policies and earn...
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
65
Positive
Balance Sheet
70
Positive
Cash Flow
75
Positive
| 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
Neutral
8.55
Price Trends
8.22
Negative
7.87
Positive
7.64
Positive
Market Momentum
-0.03
Positive
45.45
Neutral
34.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:IAG, the sentiment is Neutral. The current price of 8.55 is above the 20-day moving average (MA) of 8.43, above the 50-day MA of 8.22, and above the 200-day MA of 7.64, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 45.45 is Neutral, neither overbought nor oversold. The STOCH value of 34.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | AU$34.50B | 11.44 | 19.29% | 4.23% | 3.37% | 6.40% | |
73 Outperform | AU$20.88B | 20.52 | 9.55% | 3.58% | -2.94% | -31.48% | |
72 Outperform | AU$19.03B | 17.70 | 14.85% | 3.56% | 9.36% | -24.51% | |
69 Neutral | AU$14.02B | 30.28 | 19.79% | 3.54% | 5.81% | -5.34% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | AU$5.90B | 16.63 | 15.06% | 3.70% | 11.53% | 51.82% | |
60 Neutral | AU$3.78B | 17.84 | 11.69% | 2.95% | 11.02% | 62.95% |
* Financial Sector Average
AU:IAG
Insurance Australia Group Limited
8.14
-0.43
-5.04%
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12.37%
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Steadfast Group Limited
5.32
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AU:SUN
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19.70
-0.98
-4.74%
Insurance Australia Group Limited Corporate Events
IAG Issues 14,190 New Ordinary Shares From Unquoted Security Conversions
Jul 13, 2026
Insurance Australia Group Limited has notified the market of the issue of 14,190 ordinary fully paid shares following the conversion or exercise of previously unquoted securities. The new shares, issued on 12 June 2026 under an Appendix 3G filing,...
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...
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.