Insurance Australia Group (IAG) H1 2026 earnings summary

Executive summary

• Net profit after tax for 1H26 was $505 million, down 35.1% year-over-year, with strong capital generation and EPS at 21.37 cents.

• Gross written premium (GWP) rose 6% to $8,929 million, driven by the RACQI acquisition and underlying growth in key segments.

• Integration of RACQ/RACQI is progressing well, contributing ~$500 million GWP in four months and delivering reinsurance synergies.

• Announced an on-market share buyback of up to $200 million, supported by strong capital position.

• Interim dividend of 12 cents per share, payout ratio of 56%.

Financial highlights

• Underlying insurance profit was $804 million, with a 15.1% margin; reported insurance margin was 13.5% due to RACQI perils.

• Reported insurance profit fell 24.3% to $724 million, impacted by higher perils and integration costs.

• Retail businesses in Australia and New Zealand delivered underlying growth of ~4%, with Australian retail GWP up 14.4% (includes RACQ/RACQI).

• New Zealand retail reported insurance margin over 28%, underlying margin 26%.

• Administration expense ratio improved to 11.7%, with a material reduction in expense ratio and admin costs improved 20 bps YoY.

Outlook and guidance

• FY26 GWP growth expected to be high single-digit, with double-digit growth in 2H26, supported by RACQI and strong retail performance.

• Maintaining FY26 insurance profit guidance of $1,550–$1,750 million, targeting a 15% reported insurance margin and ROE through the cycle.

• FY26 reported insurance profit expected at the lower end of the range due to one-off RACQI impact; assumes net natural peril costs of $1,617 million.

• Expecting stronger second half retail growth, with RACQ contributing 9%.

• Commercial markets expected to remain soft; discipline in pricing and underwriting to continue.