Insurance Australia Group: A much improved performance in 2H23
About the author:
- Author name:
- By Richard Coles
- Job title:
- Senior Analyst
- Date posted:
- 23 August 2023, 6:30 AM
- Sectors Covered:
- Insurance, Diversified Financials
- Insurance Australia Group's (ASX:IAG) FY23 NPAT (A$832m) was +140% on the pcp and 6% below consensus (A$883m). At the insurance profit level the result (A$1.0bn) was closer to 3% below consensus.
- Our view was this result was fundamentally as expected. Whilst IAG had a difficult FY23 impacted by claims inflationary issues and elevated hazard claims, we think 2H23 showed a good improvement in underlying profitability and momentum going into FY24.
- We lift our IAG FY24F/F25F EPS forecasts by 1%-5% on higher top-line growth and margin assumptions. Our IAG PT rises to (login to view).
- We think the FY24 outlook for IAG is encouraging, but post a solid recent share price run, we see better relative value elsewhere in the sector. HOLD.
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