Insurance Australia Group Limited (AU:IAG)
ASX:IAG
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Insurance Australia Group Limited
(Sydney:IAG)
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Rating:72Outperform
Price Target:
AU$8.50
▲(14.25% Upside)
Action:UpgradedDate: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
Strong free cash flow
Sustained 31.26% free cash flow growth indicates durable cash generation that funds claims volatility, organic growth, the $200m buyback and dividends. Strong FCF supports capital management and reinvestment without needing material new leverage, enhancing long-term financial flexibility.
Negative Factors
Top-line contraction
A >12% revenue decline undermines scale benefits and constrains margin expansion over time. Persistent top-line weakness can limit pricing leverage, slow expense ratio improvement and reduce flexibility for investment in distribution and IT, making earnings more reliant on margin recovery than growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Sustained 31.26% free cash flow growth indicates durable cash generation that funds claims volatility, organic growth, the $200m buyback and dividends. Strong FCF supports capital management and reinvestment without needing material new leverage, enhancing long-term financial flexibility.
Read all positive factors
Insurance Australia Group Limited (IAG) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$17.60B
Dividend Yield3.91%
Average Volume (3M)5.86M
Price to Earnings (P/E)9.3
Beta (1Y)0.19
Revenue Growth8.47%
EPS Growth54.09%
CountryAU
Employees13,650
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.21
Shares Outstanding2,365,284,000
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$8.05Price Target Upside8.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.45
Revenue Forecast (FY)AU$18.42B
Insurance Australia Group Limited Business Overview & Revenue Model
Company Description
Insurance Australia Group Limited underwrites general insurance products and provides investment management services in Australia and New Zealand. It offers personal and commercial insurance products, including bicycle, comprehensive motor, commer...
How the Company Makes Money
IAG makes money primarily by underwriting general insurance risks and investing the funds it holds to pay future claims.
1) Underwriting income (insurance revenue minus claims and operating costs)
- Premiums: IAG charges premiums to policyholders...
Insurance Australia Group Limited Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 07, 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 | 1.94B | 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 | 0.00 | 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
7.44
Price Trends
7.10
Positive
7.40
Positive
7.84
Negative
Market Momentum
0.12
Negative
62.48
Neutral
86.71
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 7.44 is above the 20-day moving average (MA) of 6.98, above the 50-day MA of 7.10, and below the 200-day MA of 7.84, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 62.48 is Neutral, neither overbought nor oversold. The STOCH value of 86.71 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | AU$31.81B | 8.97 | 19.29% | 4.68% | 5.93% | 14.80% | |
73 Outperform | AU$17.76B | 18.10 | 12.51% | 26.88% | -0.54% | 26.37% | |
72 Outperform | AU$17.60B | 9.34 | 14.85% | 3.91% | 8.47% | 54.09% | |
69 Neutral | AU$12.20B | 10.89 | 21.28% | 3.73% | 6.37% | 1.73% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | AU$4.60B | 11.48 | 15.06% | 3.70% | 9.16% | 43.16% | |
60 Neutral | AU$3.15B | 25.45 | 11.17% | 2.95% | 10.98% | 23.05% |
* Financial Sector Average
AU:IAG
Insurance Australia Group Limited
7.44
-0.02
-0.21%
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21.18
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-1.53%
AU:SDF
Steadfast Group Limited
4.15
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-26.06%
AU:SUN
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16.40
-2.36
-12.57%
Insurance Australia Group Limited Corporate Events
IAG Updates Market on Progress of On‑Market Share Buy‑Back
Mar 25, 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 latest notification to the ASX reports that a total of 11,481,995 shares had been repurchased before t...
IAG Updates Market on Progress of On‑Market Share Buy‑Back
Mar 24, 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 latest daily filing, dated 25 March 2026, reports that a total of 10,552,335 ...
IAG Reports Daily Progress on Ongoing On‑Market Share Buy‑Back
Mar 23, 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, dated 24 March 2026, reports cumulative repurchases of 9,348,373 sha...
IAG Sets June 2026 Quarterly Distribution on Hybrid Capital Notes
Mar 18, 2026
Insurance Australia Group Limited has announced a quarterly distribution on its ASX-listed capital notes IAGPF, a perpetual, non-cumulative instrument paying a floating rate over the three-month bank bill swap rate. The payment reflects IAG’...
IAG sets June 2026 quarterly distribution on IAGPE capital notes
Mar 18, 2026
Insurance Australia Group Limited has announced a quarterly distribution on its listed capital notes (IAGPE), a perpetual, non-cumulative, redeemable security paying a floating rate over the 3-month bank bill swap rate. The distribution for this q...
IAG Updates Market on Progress of On‑Market Share Buy‑Back
Mar 16, 2026
Insurance Australia Group Limited has reported an on‑market buy‑back of its ordinary fully paid shares, updating the market with a daily notification. The announcement details that a total of 1,720,807 shares had been repurchased befor...
Insurance Australia Group Updates Market on Progress of On-Market Share Buy-Back
Mar 15, 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 company reported that a total of 1,711,749 securities had been repurchased before t...
IAG Updates Market on Progress of On‑Market Share Buy‑Back
Mar 8, 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 company reported that a total of 943,569 shares had been repurchased p...
IAG Updates Dividend Notice to Add DRP Pricing Detail
Mar 4, 2026
Insurance Australia Group Limited has updated its dividend notification for its ordinary fully paid shares, relating to the six‑month period ended 31 December 2025. The update, dated 5 March 2026, applies to a dividend with an ex‑date ...
IAG Names UBS as Broker for On-Market Share Buy-Back
Mar 2, 2026
Insurance Australia Group Limited has issued an updated notification to the ASX regarding its previously announced on-market share buy-back of ordinary fully paid shares, originally disclosed on 12 February 2026. The update specifies that UBS Secu...
IAG Adds New Enterprise Growth and Simplification Role to Leadership Team
Feb 22, 2026
Insurance Australia Group has created a new Group Executive, Enterprise Growth and Simplification role on its Group Leadership Team, appointing Amanda Whiting, the former Chief Executive of IAG New Zealand, to the position. Whiting brings extensiv...
IAG Issues 23,920 New Fully Paid Ordinary Shares Following Conversion of Unquoted Securities
Jan 15, 2026
Insurance Australia Group Limited has notified the market of the conversion of unquoted securities into 23,920 fully paid ordinary shares, with the issue dated 22 December 2025. The modest increase in ordinary share capital reflects the exercise o...
IAG Reports Lapse of Performance and Award Rights in Capital Update
Jan 15, 2026
Insurance Australia Group Limited has notified the market of the lapse of 100,470 performance rights and 20,800 award rights, which were conditional equity-based securities that have ceased because their vesting conditions were not met or became i...
IAG Issues New Performance and Award Rights Under Employee Incentive Scheme
Jan 15, 2026
Insurance Australia Group Limited has notified the market of the issue of 1,588,590 performance rights and 2,054,340 award rights under its employee incentive scheme, both dated 9 October 2025. The unquoted securities are designed to reward and re...
IAG Integrates RACQ Insurance into Expanded Reinsurance Program
Jan 5, 2026
Insurance Australia Group Limited has integrated newly acquired RACQ Insurance into its core reinsurance framework, bringing the Queensland-focused insurer under IAG’s main catastrophe cover, whole-of-account quota share arrangements and mul...
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.