Insurance Australia Group (IAG) H1 2025 earnings summary

Executive summary

• Net profit after tax for 1H25 rose 91.2% year-over-year to $778 million, driven by higher insurance profit, investment income, and a $200 million release from the COVID/business interruption provision, supported by favorable weather.

• Gross written premium (GWP) increased 6.0% to $8,426 million, with strong renewal rates and premium increases reflecting moderating claims inflation across Australia and New Zealand.

• Reported insurance profit rose 55.9% to $957 million, with margin improving to 19.4% from 13.7% in 1H24.

• Paid over $5.2 billion in claims, supported more than 10,000 customers in financial hardship, and invested in community resilience and technology.

• Customer experience and policy renewal rates remained high, with strong brand trust and ongoing digital transformation.

Financial highlights

• Net profit after tax: $778 million (up 91.2% year-over-year); EPS: 32.88 cents; insurance profit: $957 million; reported insurance margin: 19.4%.

• GWP: $8,426 million (up 6.0%); net earned premium: $4,930 million (up 9.7%).

• Underlying insurance margin: 15.1% (up from 13.7% in 1H24).

• Interim dividend of 12cps, up 20% year-over-year, franked to 60%, payout ratio 45% of NPAT (excluding provision release).

• CET1 capital at 1.42x PCA, above the 0.9–1.1x target range; total regulatory capital at 2.4x PCA.

Outlook and guidance

• FY25 reported insurance profit guidance: $1,400–$1,600 million, assuming natural peril costs of $1,283 million.

• Reported insurance margin expected towards the top end of 13.5%–15.5% range.

• GWP growth forecast at the lower end of mid- to high-single digits due to moderating premium increases.

• Underlying margin expected to remain around 15% in the second half, consistent with long-term targets.

• Targets a 15% reported insurance margin and 14–15% ROE through the cycle, subject to macroeconomic stability.