Insurance Australia Group (IAG) – Growing in confidence

December 17, 2024

Insurance Australia Group sells general insurance products and provides investment management services in Australia and New Zealand. It offers policies for vehicles, homes, businesses, travel, boats, caravans, landlords, farms, trade, strata and investment properties, rural and personal, construction and engineering, compulsory third party, directors and officers, professional indemnity, workers’ compensation, marine, liability, home-owners warranty, casualty insurance products, as well as reinsurance. Insurance Australia Group was founded in 1920 and is based in Sydney.

Insurance Australia Group recently hosted an investor day that left Ord Minnett more confident in the company’s earnings outlook and its options to grow the business, which was most recently boosted by the $855 million acquisition of the insurance business of Queensland motoring group RACQ.

The company is eyeing growth in car and home insurance to fuel this expansion of market share, while Ord Minnett expects the revamp of its reinsurance arrangements will remove a lot of volatility from its earnings performance. IAG is also aiming for improved margins and efficiency via technology investment, which should ameliorate lower investment yields as interest rates fall and any pressure from attritional loss rates.

Post the investor day, we have made no changes to our EPS forecast for FY25, although our FY26 and FY27 estimates rise 2% and 5%,respectively. Our target price on IAG increases to $9.30 from $8.90, and we maintain our Accumulate recommendation.

Insights that count

Discover the best opportunities to outperform the market. Our research team dig deep into the market, company and stock data to bring you insights others might overlook.

ResMed Inc. (RMD) – Diagnostic wins

ResMed manufactures sleep apnoea equipment and other respiratory devices and provides cloud-based software monitoring systems via the software as a service (SaaS) method.

Learn More

COG Financial Services (COG) – Share price better reflecting growth options

COG Financial Services provides equipment financing and broking, aggregation, insurance broking, and novated leasing activities for small to medium-sized enterprises in Australia.

Learn More

Electro Optic Systems Holdings (EOS) – A company maker

Electro Optic Systems develops and manufactures anti-drone software and systems and related laser weaponry it sells to military customers.

Learn More

Want to keep up to
date on our latest news & insights

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.