Insurance Australia Group Limited (IAG) AI Stock Analysis

• Market Cap: $17.98B
• Dividend Yield: 3.91%
• Average Volume (3M): 5.86M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.49
• Revenue Growth: 8.47%
• EPS Growth: 54.09%
• Country: AU
• Employees: 13,650
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.22
• Shares Outstanding: 2,365,284,000
• 10 Day Avg. Volume: 6,423,780
• 30 Day Avg. Volume: 5,862,566
• PEG Ratio: 0.29
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 1.45
• P/FCF Ratio: 15.79
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.15
• Enterprise Value/Gross Profit: 1.34
• Enterprise Value/Ebitda: 8.39
• 1Y Price Target: $8.73
• Price Target Upside: 14.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: AU$8.00 ▲(5.26% Upside)

The overall stock score of 63 reflects strong financial performance, particularly in operational efficiency and cash flow generation, despite revenue decline and inconsistent profitability. Technical analysis indicates a bearish trend, while valuation metrics suggest the stock is fairly valued with an attractive dividend yield.

Positive Factors

Operational efficiency & capital structure

IAG's strong operational efficiency and solid capital structure support durable underwriting capacity and claims-paying ability. Efficient operations reduce expense leakage, enable competitive pricing, and fund investments in claims systems and distribution, improving resilience across insurance cycles.

Free cash flow generation

A 31.26% rise in free cash flow and FCF/net income parity indicate reliable cash generation. Persistent FCF supports reinsurance funding, reserve strengthening, dividends and strategic investments without relying solely on underwriting profits, increasing long-term financial flexibility.

Moderate leverage

A moderate debt-to-equity ratio (~0.40) and strong equity base preserve balance-sheet flexibility. Lower leverage reduces funding risk, helps absorb large loss events, and supports disciplined capital management and steady reinsurance purchasing through adverse cycles.

Negative Factors

Revenue decline

A 12.27% revenue decline shrinks underwriting scale and pricing leverage. Sustained top-line contraction impairs fixed-cost absorption, limits investment in distribution and products, and can force tighter underwriting or higher prices, hindering medium-term growth and market share recovery.

Profitability volatility

Inconsistent profitability and a relatively low net margin indicate earnings volatility and weaker internal capital generation. Over months this constrains reserve accumulation, limits surplus available for growth or payouts, and increases sensitivity to adverse claims or reserving developments.

Natural peril exposure & reinsurance costs

Material exposure to natural perils makes earnings and capital cyclical; reinsurance reduces tail risk but adds recurring expense. With climate-driven increases in event frequency/severity, underwriting volatility and higher capital buffers are structural challenges that pressure margins and pricing.

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, 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 Money

IAG generates revenue primarily through the sale of insurance premiums. The company collects premiums from policyholders for various types of insurance coverage, including motor, property, and liability insurance. This revenue model is supplemented by investment income derived from the funds held in reserve for future claims, which are strategically invested in a diversified portfolio. Key revenue streams include underwriting income from the difference between premiums collected and claims paid out, as well as fees for services related to insurance policies. IAG has formed significant partnerships with brokers and financial institutions, enhancing its distribution channels and market reach, which contribute to its overall earnings. Additionally, effective risk management and claims processing strategies help to optimize profitability.

Insurance Australia Group Limited Financial Statement Overview

Summary

Insurance Australia Group Limited demonstrates strong operational efficiency and a solid capital structure. However, the decline in revenue and inconsistent profitability are concerns. The company shows resilience in cash flow generation, which is a positive indicator for future stability.

Income Statement

The income statement shows a mixed performance. Gross profit margins are exceptionally high, indicating strong pricing power or cost management. However, the net profit margin is relatively low, suggesting high operating expenses or other costs. Revenue has declined by 12.27% in the latest year, which is a concern, though previous years showed growth. EBIT and EBITDA margins are healthy, indicating operational efficiency.

Balance Sheet

The balance sheet is stable with a moderate debt-to-equity ratio of 0.40, indicating a balanced approach to leverage. The equity ratio is strong, suggesting a solid capital structure. However, the return on equity has been inconsistent, reflecting fluctuating profitability.

Cash Flow

Cash flow analysis reveals a positive trend with a 31.26% growth in free cash flow, indicating improved cash generation. The operating cash flow to net income ratio is low, suggesting potential issues in converting income to cash. However, the free cash flow to net income ratio is strong at 1.0, indicating good cash profitability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.55B	14.76B	15.99B	409.00M	7.57B	7.88B
Gross Profit	15.06B	15.06B	15.99B	8.93B	7.57B	7.88B
EBITDA	2.40B	2.63B	1.88B	1.69B	779.00M	-67.00M
Net Income	1.36B	1.36B	898.00M	832.00M	347.00M	-427.00M
Balance Sheet
Total Assets	26.31B	26.31B	25.62B	35.03B	34.16B	33.46B
Cash, Cash Equivalents and Short-Term Investments	703.00M	703.00M	631.00M	1.35B	938.00M	2.00B
Total Debt	2.96B	2.96B	2.94B	2.64B	2.58B	2.57B
Total Liabilities	18.52B	18.52B	18.50B	27.98B	27.66B	26.90B
Stockholders Equity	7.33B	7.33B	6.66B	6.65B	6.16B	6.25B
Cash Flow
Free Cash Flow	324.00M	1.35B	1.16B	452.00M	-526.00M	-799.00M
Operating Cash Flow	1.35B	1.35B	1.80B	452.00M	900.00M	1.61B
Investing Cash Flow	38.00M	38.00M	-628.00M	394.00M	-1.46B	-2.42B
Financing Cash Flow	-982.00M	-982.00M	-682.00M	-437.00M	-527.00M	516.00M

Insurance Australia Group Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 7.6 is below the 20-day moving average (MA) of 7.65, below the 50-day MA of 7.74, and below the 200-day MA of 8.20, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 47.70 is Neutral, neither overbought nor oversold. The STOCH value of 63.86 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLI	74 Outperform	AU$1.59B	6.00	25.94%	5.51%	-7.39%	30.01%
NHF	72 Outperform	AU$3.28B	16.23	18.51%	4.17%	5.90%	7.22%
MPL	71 Outperform	AU$12.72B	25.41	21.28%	3.73%	6.37%	1.73%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
QBE	66 Neutral	AU$29.72B	9.80	18.97%	4.68%	5.93%	14.80%
SUN	65 Neutral	AU$18.41B	11.97	12.51%	26.88%	-0.54%	26.37%
IAG	63 Neutral	$17.98B	13.20	19.09%	3.91%	8.47%	54.09%

Insurance Australia Group Limited Corporate Events

IAG Issues 23,920 New Fully Paid Ordinary Shares Following Conversion of Unquoted Securities

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 or conversion of existing unquoted equity instruments, a routine capital management activity that slightly broadens the company’s shareholder base without indicating any major strategic shift.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.45 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Reports Lapse of Performance and Award Rights in Capital Update

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 incapable of being satisfied. The cessation of these rights, recorded in an Appendix 3H filing, represents an adjustment to IAG’s issued capital and indicates that certain performance or service hurdles tied to executive and employee incentives were not achieved, with implications for the company’s equity-based remuneration structure but no immediate operational impact disclosed.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.45 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Issues New Performance and Award Rights Under Employee Incentive Scheme

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 retain staff and executives through equity-based incentives, aligning employee interests with shareholder value and signalling the ongoing use of long-term incentive structures in IAG’s capital and remuneration framework.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.45 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Integrates RACQ Insurance into Expanded Reinsurance Program

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 multi-year aggregate stop-loss protection. The expanded program now cedes 35% of IAG’s consolidated business, provides catastrophe cover for two events up to $10 billion with a $500 million attachment, and delivers around $1 billion in annual downside protection from natural perils through to FY29, moves which management says will capture targeted synergies, take advantage of improved global reinsurance market conditions and further reduce earnings volatility for the group.

The most recent analyst rating on (AU:IAG) stock is a Buy with a A$9.10 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

ACCC Blocks IAG-RAC Strategic Alliance Proposal

The Australian Competition and Consumer Commission (ACCC) has opposed IAG’s proposed strategic alliance with The Royal Automobile Club of Western Australia (RAC) to provide general insurance products and services. Despite this setback, IAG plans to apply for assessment under the new mandatory merger control regime starting in 2026. The alliance aims to enhance the RAC member experience, bolster resilience against industry challenges, and support local community initiatives, leveraging IAG’s national presence, technological investments, and capital management.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.80 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

ACCC Blocks IAG’s Acquisition of RAC Insurance Over Competition Concerns

The Australian Competition and Consumer Commission (ACCC) has opposed IAG’s proposed acquisition of RAC Insurance Pty Limited (RACI), citing concerns over reduced competition in Western Australia’s motor vehicle and home insurance markets. The ACCC’s investigation concluded that the merger would significantly lessen competition, potentially leading to increased premiums and reduced service quality. Despite the presence of other insurers, the ACCC believes they would not sufficiently counterbalance the competitive loss. RACI is deemed capable of continuing as a strong competitor independently, managing industry challenges effectively.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.80 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Appoints Phillip Gibson as Chief Executive of New Zealand Operations

Insurance Australia Group Limited (IAG) has announced the appointment of Phillip Gibson as the Chief Executive of IAG New Zealand, effective March 2, 2026. With over 30 years of experience in insurance, advisory, and technology leadership, Gibson is expected to bring significant expertise to IAG, particularly in executing business strategies that enhance customer and broker satisfaction. He succeeds Amanda Whiting, who has successfully led IAG New Zealand through various challenges and will transition to a group role in Australia.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$8.80 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Responds to Recent Natural Peril Events with Strong Reinsurance Protections

Insurance Australia Group Limited (IAG) has been significantly impacted by recent natural peril events in Australia, receiving over 10,000 claims related to motor and property hail damage. The company has activated its Major Event Command Centre and deployed teams to assist affected customers, including providing temporary accommodation for vulnerable individuals. IAG’s robust reinsurance protections are mitigating the financial impact of these events, with specific measures in place for its recent acquisition, RACQI. The company maintains its FY26 guidance as previously outlined.

The most recent analyst rating on (AU:IAG) stock is a Buy with a A$9.65 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 Announces Director’s Interest Update

Insurance Australia Group Limited announced a change in the director’s interest notice concerning Wendy Thorpe. The notice reveals that there has been no change in the number of ordinary shares held directly or indirectly by Thorpe, maintaining a total of 24,954 shares. Additionally, Thorpe acquired 5,902 Non-Executive Directors Award rights under the IAG Share and Performance Award Rights Plan, indicating a potential increase in her future stake in the company. This announcement is significant for stakeholders as it reflects the company’s ongoing commitment to aligning director interests with company performance.

The most recent analyst rating on (AU:IAG) stock is a Buy with a A$9.65 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.

IAG Director’s Interest Notice Update: Significant Increase in Performance Rights

Insurance Australia Group Limited announced a change in the director’s interest notice, specifically concerning Nicholas Hawkins. The update revealed no change in the number of fully paid ordinary shares held by Hawkins, maintaining his holding at 857,832 shares. However, there was a significant increase in his Deferred Awards Rights (DARs) and Executive Performance Rights (EPRs), with an acquisition of 135,410 DARs and 334,440 EPRs, bringing his total to 170,090 DARs and 1,903,780 EPRs. This change reflects the company’s ongoing commitment to aligning executive interests with shareholder value, potentially impacting stakeholder perceptions positively.

The most recent analyst rating on (AU:IAG) stock is a Buy with a A$9.65 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 Issues Unquoted Equity Securities for Employee Incentives

Insurance Australia Group Limited announced the issuance of unquoted equity securities under an employee incentive scheme. This move involves the allocation of performance rights and award rights, which are subject to transfer restrictions, and reflects the company’s strategy to incentivize and retain employees, potentially impacting its operational efficiency and market competitiveness.

The most recent analyst rating on (AU:IAG) stock is a Buy with a A$9.65 price target. To see the full list of analyst forecasts on Insurance Australia Group Limited stock, see the AU:IAG Stock Forecast page.