Insurance Australia Group: A much improved performance in 2H23

About the author:

Richard Coles
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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