IAG shares rise as discontinued class action frees up $200m
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More news: IAG shares gained on the ASX after the insurer said it expects to release $200 million of a $380 million provision linked to a discontinued Federal Court class action.
IAG shares were up 2.1% to $9.12 by 3:10pm AEDT, having climbed more than 50% over the last 12 months.
IAG to release $200m in provisions as class action discontinued
The news: Insurer IAG expects to release $200 million of a $380 million provision linked to a Federal Court class action, following a court decision that the matter will no longer continue as a class action from 26 March.
The context: Slater & Gordon initiated class action proceedings against IAG subsidiaries Insurance Australia Limited (IAL) and Insurance Manufacturers of Australia (IMA) in May 2024.
A Slater & Gordon investigation had suggested that IAL and IMA had used pricing strategies between 27 May 2018 and 27 May 2024 for home and contents insurance that raised the base of premiums of customers they considered less likely to switch providers.
The Federal Court ordered in December that the matter no longer continue as a class action from 26 March and that group members would be able to opt out of the matter prior to that date to avoid being bound by earlier court rulings.
IAG is due to announce its financial results for the six months to 31 December on 13 February.
The source: ASX announcement
