IAG posts 21% jump in insurance profit, lifts dividend
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The news: Insurance group IAG has reported full-year insurance profit of $1.74 billion, up 21.2% from $1.44 billion a year earlier, after natural perils costs came in $195 million below the company's annual allowance.
The numbers: Analysts had expected insurance profit of $1.72 billion, according to Visible Alpha data. Last month, IAG raised its guidance to between $1.6 billion and $1.8 billion, from $1.4 billion to $1.6 billion.
Net profit after tax was up 51.3% year on year, from $898 million to $1.36 billion. Gross written premium (GWP) climbed 4.3% from $16.4 billion to $17.1 billion.
The company declared a final dividend of 19 cents per share, up 11.8% on last year's payout of 17 cents and in line with consensus forecasts.
The context: IAG has guided 'low-to-mid single digit' GWP growth in the 2026 financial year, reflecting premium increases due to moderating claims inflation, combined with direct customer and volume growth.
The insurer also guided reported insurance profit of between $1.45 billion and $1.65 billion, assuming a natural peril allowance of $1.316 billion. This year's natural peril costs totalled $1.088 billion.
IAG said its FY26 guidance does not include the benefit of its recent acquisitions of the Royal Automobile Club of Queensland and the Royal Automobile Club of Western Australia, which are expected to complete on 1 September. These are set to increase GWP growth to around 10%, the company said.
The source: ASX
