Insurance Australia Group Limited (IAG) AI Stock Analysis

• Market Cap: $21.12B
• Dividend Yield: 1.69%
• Average Volume (3M): 3.93M
• Price to Earnings (P/E): 16.7
• Beta (1Y): 0.45
• Revenue Growth: 34.77%
• EPS Growth: N/A
• Country: AU
• Employees: 13,650
• Sector: Financial
• Sector Strength: 77
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.26
• Shares Outstanding: 2,365,284,000
• 10 Day Avg. Volume: 3,777,159
• 30 Day Avg. Volume: 3,930,657
• PEG Ratio: 0.12
• Price to Book (P/B): 2.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.93
• 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: $8.90
• Price Target Upside: -0.66% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 76 Outperform
• 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 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 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

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
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
16.83B	15.99B	409.00M	7.57B	7.88B	7.22B
	Gross Profit
16.94B	15.99B	8.93B	7.57B	7.88B	7.84B
	EBIT
16.69B	15.79B	1.51B	7.41B	-334.00M	7.03B
	EBITDA
2.42B	1.88B	1.69B	779.00M	-67.00M	776.00M
	Net Income Common Stockholders
1.27B	898.00M	832.00M	347.00M	-427.00M	435.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.70B	631.00M	1.35B	938.00M	2.00B	2.30B
	Total Assets
25.17B	25.62B	35.03B	34.16B	33.46B	29.62B
	Total Debt
2.50B	2.94B	2.64B	2.58B	2.57B	2.18B
	Net Debt
793.00M	1.10B	1.28B	1.65B	574.00M	-117.00M
	Total Liabilities
17.71B	18.50B	27.98B	27.66B	26.90B	23.27B
	Stockholders Equity
7.01B	6.66B	6.65B	6.16B	6.25B	6.08B
Cash Flow		Free Cash Flow
1.03B	1.16B	452.00M	-526.00M	-799.00M	381.00M
	Operating Cash Flow
1.32B	1.80B	452.00M	900.00M	1.61B	381.00M
	Investing Cash Flow
-136.00M	-628.00M	394.00M	-1.46B	-2.42B	1.57B
	Financing Cash Flow
-1.15B	-682.00M	-437.00M	-527.00M	516.00M	-1.32B

Insurance Australia Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.96
• 50DMA: Positive
• 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 8.96 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IAG	76 Outperform	$21.12B	16.72	18.88%	1.69%	34.77%	―
Sector *	65 Neutral	$12.93B	9.81	7.84%	78.03%	12.20%	-7.74%
0GI0		€812.11M	6.06	20.91%	6.39%	―	―
MDBPF		$8.71B	16.95	20.97%	5.08%	―	―
3GU		€1.81B	17.37	15.78%	4.33%	―	―
QBEIF		$23.21B	13.39	17.21%	5.23%	―	―
SNMYF		$15.20B	16.07	9.52%	2.75%	―	―

Insurance Australia Group Limited Corporate Events

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.

Insurance Australia Group Issues New Securities to Strengthen Market Position

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

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

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

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

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.