IAG upgrades full-year guidance after RACQ Insurance acquisition
Make us a preferred source
Make us a preferred source on Google
The news: Insurance group IAG has upgraded its FY26 guidance after completing the $855m acquisition of the Royal Automobile Club of Queensland's (RACQ) insurance business.
The numbers: IAG expects full-year gross written premium (GWP) growth of around 10%, up from the previous "low-to-mid single digit" range previously guided.
Reported insurance profit is now expected to be between $1.55 billion and $1.75 billion, up $100 million from the previous range of $1.45 billion and $1.65 billion.
This roughly equates to a reported insurance margin range of 14% to 16%.
The context: IAG said the upgrade reflected the inclusion of RACQ Insurance from 1 September. Managing director and CEO Nick Hawkins said the acquired business is performing "slightly ahead of our expectations."
IAG acquired 90% of the shares in RACQ Insurance, with an option to acquire the remaining 10% in two years on consistent terms. The $855 million purchase price also included payment for entry into a 25-year distribution agreement and saw IAG become RACQ’s exclusive partner for insurance underwriting.
What they said: "The internally funded acquisition is strategically aligned with our growth ambitions, and the integration process is progressing smoothly," Hawkins said.
"It strengthens our position in the Queensland market and supports our 'through the cycle' targets of a 15% reported insurance margin and 15% return on equity."
The source: ASX
