Insurance Australia Group (IAG) H2 2025 earnings summary

Executive summary

• Net profit after tax rose 51.3% year-over-year to $1,359m, driven by premium growth, higher insurance profit, and investment income, with strong results in both Australia and New Zealand.

• Gross written premium increased 4.3% to $17,106m, with direct business and all divisions contributing positively.

• Insurance profit grew 21.2% to $1,743m, with reported insurance margin improving to 17.5%.

• Over $10.2bn in claims paid and more than $8.8m invested in community initiatives, supporting over 15,000 customers in financial hardship.

• Strategic acquisitions and alliances with RACQ and RAC in Queensland and Western Australia expected to add ~$3bn in GWP and boost insurance profit by at least $300m.

Financial highlights

• Net earned premium rose 8% to $9,984m; underlying insurance profit increased 15.3% to $1,542m, with underlying margin at 15.5%.

• Reported return on equity (ROE) rose to 19.4%, up 590bps from prior year.

• Final dividend declared at 19.0cps (full year 31.0cps), up 14.8% from FY24, with a payout ratio at ~65%.

• CET1 capital ratio at 1.47x, above the 0.9–1.1 target range, with pro forma CET1 at 1.0x post-acquisitions.

• GWP growth of 4.3% reported, over 5% on an underlying basis, with direct business up 7.7%.

Outlook and guidance

• FY26 guidance: GWP growth in the low-to-mid single digits, with divisional growth varying from flat to mid-single digits.

• Reported insurance profit expected between $1,450m and $1,650m, with a margin of 14.0% to 16.0%.

• RACQ and RAC acquisitions expected to lift GWP growth to ~10% and add $3bn in premium and at least $300m in insurance profit, with double-digit EPS accretion.

• FY26 perils allowance set at $1,316m, up ~3% reflecting exposure growth.

• Guidance and targets subject to macroeconomic conditions, regulatory approvals, and no material adverse events.