Insurance Australia Group Limited (IAG) AI Stock Analysis

• Market Cap: AU$20.60B
• Dividend Yield: 3.33%
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.45
• Revenue Growth: 34.77%
• EPS Growth: N/A
• Country: AU
• Employees: 13,650
• Sector: Financial
• Sector Strength: 64
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.26
• Shares Outstanding: 2,365,284,000
• 10 Day Avg. Volume: 3,396,492
• 30 Day Avg. Volume: 3,284,464
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$8.95
• Price Target Upside: 2.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: AU$9.50 ▲(9.07% Upside)

Insurance Australia Group Limited shows strong financial performance with robust revenue growth and cash flow generation. However, technical indicators suggest a cautionary stance due to bearish momentum. The valuation is fair, though not undervalued. Overall, the company is well-positioned financially, but market conditions call for a conservative approach.

Insurance Australia Group Limited Business Overview & Revenue Model

Company Description

Insurance Australia Group Limited (IAG) is a leading insurance company in the Asia-Pacific region, headquartered in Sydney, Australia. The company operates through a range of well-known brands, including NRMA Insurance, CGU, SGIO, SGIC, and WFI in Australia, as well as AMI and State Insurance in New Zealand. IAG offers a comprehensive suite of insurance products and services, including motor, home, business, and travel insurance, catering to both personal and commercial customers.

How the Company Makes Money

IAG makes money primarily through the underwriting and sale of insurance policies across various sectors, including motor, home, and business insurance. The company collects premiums from policyholders in exchange for providing coverage against specified risks. Revenue is generated through the difference between the premiums collected and the claims paid out, a concept known as underwriting profit. Additionally, IAG invests the premiums collected in financial markets, earning investment income which contributes to the company's overall profitability. Strategic partnerships and collaborations with other financial institutions and distribution partners also play a role in expanding IAG's market reach and enhancing its revenue streams.

Insurance Australia Group Limited Financial Statement Overview

Summary

Insurance Australia Group Limited exhibits strong financial health, characterized by robust revenue growth, efficient cost management, and solid cash flow generation. The balance sheet is stable with moderate leverage, though improvements in net profit margins and a higher equity ratio could enhance financial stability further. The company's financial performance is commendable, positioning it well for future growth and resilience within the insurance industry.

Income Statement

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

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

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	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	15.99B	409.00M	7.57B	7.88B	7.22B
Gross Profit	15.99B	8.93B	7.57B	7.88B	7.84B
EBITDA	1.88B	1.69B	779.00M	-67.00M	776.00M
Net Income	898.00M	832.00M	347.00M	-427.00M	435.00M
Balance Sheet
Total Assets	25.62B	35.03B	34.16B	33.46B	29.62B
Cash, Cash Equivalents and Short-Term Investments	631.00M	1.35B	938.00M	2.00B	2.30B
Total Debt	2.94B	2.64B	2.58B	2.57B	2.18B
Total Liabilities	18.50B	27.98B	27.66B	26.90B	23.27B
Stockholders Equity	6.66B	6.65B	6.16B	6.25B	6.08B
Cash Flow
Free Cash Flow	1.16B	452.00M	-526.00M	-799.00M	381.00M
Operating Cash Flow	1.80B	452.00M	900.00M	1.61B	381.00M
Investing Cash Flow	-628.00M	394.00M	-1.46B	-2.42B	1.57B
Financing Cash Flow	-682.00M	-437.00M	-527.00M	516.00M	-1.32B

Insurance Australia Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.71
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 8.71 is above the 20-day moving average (MA) of 8.54, below the 50-day MA of 8.72, and above the 200-day MA of 8.23, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 53.82 is Neutral, neither overbought nor oversold. The STOCH value of 77.49 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NHF	81 Outperform	AU$3.66B	22.11	15.78%	3.65%	8.40%	-22.95%
QBE	79 Outperform	AU$34.70B	13.16	17.21%	3.80%	6.01%	31.57%
MPL	73 Outperform	AU$14.10B	28.80	20.97%	3.36%	5.21%	-21.15%
IAG	72 Outperform	AU$20.60B	16.15	18.88%	3.33%	34.77%	―
HLI	69 Neutral	$1.39B	6.37	20.91%	6.07%	-6.90%	-5.67%
SUN	67 Neutral	AU$22.42B	15.89	9.52%	5.58%	-11.75%	―
Sector *	62 Neutral	AU$10.22B	9.27	11.82%	5.04%	33.79%	41.40%

Insurance Australia Group Limited Corporate Events

Insurance Australia Group Issues New Unquoted Equity Securities

Insurance Australia Group Limited announced the issuance of 20,340 unquoted equity securities, specifically ordinary fully paid shares, as of June 13, 2025. This move is part of the company’s ongoing financial operations and may impact its market positioning by potentially increasing its capital base, thereby influencing stakeholder interests.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.85 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 Cessation of Securities

Insurance Australia Group Limited announced the cessation of certain securities, specifically 183,220 performance rights and 44,630 award rights, due to the lapse of conditional rights that were not satisfied. This development may impact the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments and strategic positioning in the market.

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 Updates FY25 Financial Guidance with Positive Outlook

IAG has updated its financial guidance for the fiscal year ending June 2025, highlighting a favorable reduction in natural perils costs, estimated at $1,080 million, which is $200 million below the allowance. This reduction has led to an increase in the company’s reported insurance profit guidance to a range of $1,600 million to $1,800 million and an improved insurance margin guidance towards the top end of the 15.5% to 17.5% range. The Gross Written Premium (GWP) growth is expected to be between 4% and 4.5%, despite challenges such as the Coles exit and adverse currency effects. The Australian direct home and motor segments are experiencing solid growth, while the New Zealand commercial business faces softer market conditions.

The most recent analyst rating on (AU:IAG) stock is a Hold with a A$6.85 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 Ceases 45,000 Securities

Insurance Australia Group Limited has announced the cessation of 45,000 subordinated floating rate notes, which were redeemed without conversion. This move reflects the company’s ongoing efforts to manage its capital structure effectively, potentially impacting its financial strategy and stakeholder interests.

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 Mobilizes Major Event Response for NSW Floods

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

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

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

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

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

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.