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Insurance Australia Group Limited (AU:IAG)
ASX:IAG

Insurance Australia Group Limited (IAG) AI Stock Analysis

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AU

Insurance Australia Group Limited

(Sydney:IAG)

Rating:76Outperform
Price Target:
AU$10.00
▲(11.61%Upside)
IAG's overall stock score reflects strong financial performance with robust revenue growth and cash flow generation. Technical indicators suggest a positive trend, though caution is advised due to near overbought RSI levels. Valuation is reasonable with a supportive dividend yield, making the stock attractive but warranting careful monitoring.

Insurance Australia Group Limited (IAG) vs. iShares MSCI Australia ETF (EWA)

Insurance Australia Group Limited Business Overview & Revenue Model

Company DescriptionInsurance 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, commercial and motor fleet, commercial property and liability, construction and engineering, consumer credit, compulsory third party, directors and officers, extended warranty, farm, crop, livestock, home and contents, income protection, marine, veteran, vintage and classic car, boat, caravan, travel, life, professional indemnity, public and product liability, security, workers' compensation, motor vehicle, business, and rural and horticultural, as well as reinsurance. The company sells its products through branches and agencies, call centers, online facilities, brokers, agents, authorized representatives, and financial institutions; and third parties under the NRMA Insurance, SGIO, SGIC, RACV, CGU, ROLLiN, WFI, Swann Insurance, NZI, State, AMI, Lumley, and Coles Insurance brands. The company was formerly known as NRMA Insurance Group Limited and changed its name to Insurance Australia Group Limited in 2002. Insurance Australia Group Limited was founded in 1920 and is based in Sydney, Australia.
How the Company Makes MoneyIAG makes money primarily through the underwriting of insurance policies and the collection of insurance premiums. The company's revenue model is centered around providing personal and commercial insurance products, where customers pay premiums to cover potential risks. These premiums form the bulk of IAG's income. Additionally, IAG generates investment income by investing the premiums collected in various financial instruments, such as bonds and equities, to earn returns. The company also engages in strategic partnerships and alliances to enhance its product offerings and market reach, contributing to its earnings. Key factors influencing IAG's revenue include premium pricing, claims management, and the overall economic environment affecting insurance demand.

Insurance Australia Group Limited Financial Statement Overview

Summary
IAG demonstrates strong financial health with impressive revenue growth and efficient cost management. Cash flow generation is robust, supporting liquidity and operational flexibility. However, there is room for improvement in net profit margins and a higher equity ratio could enhance stability.
Income Statement
87
Very Positive
IAG's income statement shows impressive revenue growth with a 79.17% increase over the past year. The gross profit margin is notably high at 102.06%, indicating efficient cost management. The net profit margin of 5.61% reflects profitability, though there is room for improvement. The EBIT margin is strong at 98.71%, and the EBITDA margin of 11.73% highlights good operational performance. Overall, the company demonstrates strong revenue growth and profitability, although the net profit margin suggests some pressure on the bottom line.
Balance Sheet
75
Positive
IAG's balance sheet reveals a stable financial position with a Debt-to-Equity ratio of 0.44, indicating moderate leverage. The Return on Equity (ROE) stands at 13.49%, showing efficient use of equity. An equity ratio of 25.99% indicates a balanced capital structure, though a higher equity proportion could enhance stability. The company maintains a solid equity base and good asset management, but there are potential risks associated with leverage.
Cash Flow
82
Very Positive
The cash flow statement indicates robust free cash flow growth of 157.52% year-over-year, showing improved cash generation capabilities. The operating cash flow to net income ratio of 2.00 suggests strong cash flow generation from operations relative to net income. The free cash flow to net income ratio of 1.29 further emphasizes this strength. Cash flow management is a notable strength, supporting liquidity and operational flexibility.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
16.83B15.99B409.00M7.57B7.88B7.22B
Gross Profit
16.94B15.99B8.93B7.57B7.88B7.84B
EBIT
16.69B15.79B1.51B7.41B-334.00M7.03B
EBITDA
2.42B1.88B1.69B779.00M-67.00M776.00M
Net Income Common Stockholders
1.27B898.00M832.00M347.00M-427.00M435.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.70B631.00M1.35B938.00M2.00B2.30B
Total Assets
25.17B25.62B35.03B34.16B33.46B29.62B
Total Debt
2.50B2.94B2.64B2.58B2.57B2.18B
Net Debt
793.00M1.10B1.28B1.65B574.00M-117.00M
Total Liabilities
17.71B18.50B27.98B27.66B26.90B23.27B
Stockholders Equity
7.01B6.66B6.65B6.16B6.25B6.08B
Cash FlowFree Cash Flow
1.03B1.16B452.00M-526.00M-799.00M381.00M
Operating Cash Flow
1.32B1.80B452.00M900.00M1.61B381.00M
Investing Cash Flow
-136.00M-628.00M394.00M-1.46B-2.42B1.57B
Financing Cash Flow
-1.15B-682.00M-437.00M-527.00M516.00M-1.32B

Insurance Australia Group Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.96
Price Trends
50DMA
8.28
Positive
100DMA
8.17
Positive
200DMA
7.99
Positive
Market Momentum
MACD
0.16
Negative
RSI
63.39
Neutral
STOCH
73.70
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 8.96 is above the 20-day moving average (MA) of 8.73, above the 50-day MA of 8.28, and above the 200-day MA of 7.99, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 63.39 is Neutral, neither overbought nor oversold. The STOCH value of 73.70 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

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUIAG
76
Outperform
$21.12B16.7218.88%1.69%34.77%
65
Neutral
$12.93B9.817.84%78.03%12.20%-7.74%
€812.11M6.0620.91%6.39%
$8.71B16.9520.97%5.08%
DE3GU
€1.81B17.3715.78%4.33%
$23.21B13.3917.21%5.23%
$15.20B16.079.52%2.75%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:IAG
Insurance Australia Group Limited
8.96
2.63
41.59%
DE:0GI0
Genworth Mortgage Insurance Australia Ltd
2.96
0.82
38.32%
MDBPF
Medibank Private
1.99
0.09
4.74%
DE:3GU
NIB Holdings Ltd
3.80
-0.36
-8.65%
QBEIF
QBE Insurance Group Limited
15.10
3.42
29.28%
SNMYF
Suncorp Group
13.80
3.93
39.82%

Insurance Australia Group Limited Corporate Events

IAG Mobilizes Major Event Response for NSW Floods
May 27, 2025

Insurance Australia Group Limited (IAG) has responded to the recent floods in the NSW Mid North Coast and Hunter regions by receiving approximately 2,500 claims related to property damage. The company has deployed its Major Event Response teams to assist affected customers, offering immediate support such as temporary accommodation and emergency financial assistance. IAG is also working on resilience measures during the repair process to mitigate future risks. While the financial impact of the floods is still being assessed, IAG’s comprehensive reinsurance program is expected to provide substantial protection against potential losses.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.60 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Secures ACCC Approval for Strategic Alliance with RACQ
May 22, 2025

Insurance Australia Group Limited (IAG) has received approval from the Australian Competition and Consumer Commission (ACCC) for its strategic alliance with RACQ Insurance Limited, allowing IAG to acquire RACQ Insurance and provide general insurance products to RACQ members and Queenslanders. This 25-year alliance, subject to further regulatory approvals, is expected to be completed in the third quarter of 2025 and will add approximately $1.3 billion to IAG’s Gross Written Premium. The partnership aims to leverage IAG’s scale and technology while maintaining RACQ’s brand and customer relationships, with anticipated synergies exceeding $50 million annually.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.60 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

ACCC Approves IAG’s Acquisition of RACQ Insurance
May 22, 2025

The Australian Competition and Consumer Commission (ACCC) has decided not to oppose IAG’s proposed acquisition of RACQ Insurance Limited (RACQI), as the acquisition is unlikely to significantly reduce competition in the insurance market. The ACCC’s investigation found that RACQI has been losing market share and faces challenges in maintaining competitiveness due to higher natural hazard risks and limited capital access. The acquisition is not expected to impact the markets for smash repair, windscreen repair and replacement, and building repair services due to IAG’s market position relative to other insurers.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.60 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Announces Redemption of $450 Million Subordinated MTNs
May 19, 2025

Insurance Australia Group Limited has announced the redemption of its $450 million Subordinated Medium Term Notes (MTNs) due on 15 June 2045. The redemption will occur on 16 June 2025, as part of the company’s wholesale debt issuance program. This move reflects IAG’s strategic financial management and may impact its capital structure, but it does not indicate future redemptions of other regulatory capital instruments.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.60 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Forms Strategic Alliance with RAC to Expand Insurance Reach in Western Australia
May 15, 2025

IAG has announced a strategic alliance with The Royal Automobile Club of Western Australia (RAC), involving the acquisition of RAC Insurance and a 20-year exclusive distribution agreement for RAC-branded insurance products. This partnership is expected to enhance IAG’s market presence in Western Australia, adding approximately $1.5 billion to its Gross Written Premium and generating $100 million in pre-tax annual synergies. The alliance will leverage IAG’s national scale and advanced technology to benefit RAC’s 1.3 million members, while maintaining the trusted RAC brand and supporting local employment and community initiatives.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$5.45 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

Insurance Australia Group Appoints New Director
May 11, 2025

Insurance Australia Group Limited has announced the appointment of JoAnne Maree Stephenson as a director, effective May 12, 2025. The initial director’s interest notice indicates that Stephenson currently holds no securities in the company, suggesting a fresh perspective and potential strategic shifts in the company’s governance.

Insurance Australia Group Issues New Securities to Strengthen Market Position
Apr 14, 2025

Insurance Australia Group Limited has announced the issuance of 67,590 ordinary fully paid securities, effective from March 31, 2025. This move is part of the company’s ongoing efforts to manage its equity structure, potentially impacting its market positioning and offering implications for stakeholders in terms of equity distribution and company valuation.

IAG Announces Cessation of Securities Due to Unmet Conditions
Apr 14, 2025

Insurance Australia Group Limited announced the cessation of certain securities due to unmet conditions, impacting a total of 215,810 performance and award rights. This development may affect the company’s capital structure and reflects the challenges in meeting performance criteria, potentially influencing stakeholder perceptions and market positioning.

IAG Strengthens Board with New Appointment
Mar 27, 2025

Insurance Australia Group Limited (IAG) has appointed JoAnne Stephenson as an Independent Non-Executive Director to its Board, effective May 12, 2025. Stephenson brings extensive experience in financial services, risk management, and governance, enhancing the board’s capabilities in guiding IAG’s strategic direction. Her appointment is expected to strengthen IAG’s board with her expertise in finance and transformational change, potentially impacting the company’s operations and industry positioning positively.

Insurance Australia Group Announces New Dividend Distribution
Mar 17, 2025

Insurance Australia Group Limited has announced a new dividend distribution for its security IAGPF, with a distribution amount of AUD 1.4504. The payment will be made on June 16, 2025, following the record date of June 4, 2025. This announcement reflects the company’s ongoing financial strategies and impacts stakeholders by providing returns on investments, aligning with market expectations.

IAG Announces New Dividend Distribution for CAP NOTE Security
Mar 17, 2025

Insurance Australia Group Limited has announced a new dividend distribution for its CAP NOTE 3-BBSW+3.50% PERP NON-CUM RED T-06-29 security. The distribution amount is set at AUD 1.51, with a payment date of June 16, 2025. This announcement reflects IAG’s ongoing commitment to providing returns to its investors, potentially enhancing its attractiveness to stakeholders and reinforcing its market position.

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.