Insurance Australia Group (IAG) H2 2025 earnings summary

Executive summary

• Achieved strong financial results, with net profit after tax rising 51.3% to $1,359m and insurance profit up 21.2% to $1,743m, meeting or exceeding expectations.

• Over $10.2 billion in claims paid, robust customer retention, and Net Promoter Scores, with more than $8.8m invested in community initiatives.

• Added over 66,000 net new retail customers and completed scalable technology platform rollouts, supporting organic and inorganic growth.

• Acquired Royal Automobile Club of Queensland and Royal Automobile Club of Western Australia, funded through organic capital generation, expected to add $3bn in GWP opportunities.

• Gross written premium (GWP) increased 4.3% to $17,106m, driven by direct business and positive customer momentum.

Financial highlights

• Reported insurance profit of $1.7 billion, with a margin of 17.5%, and underlying insurance profit up 15.3% to $1,542m.

• Underlying margin of 15.5%, ahead of the 15% through-the-cycle target.

• Dividend per share increased 14.8% to 31.0cps, with a final dividend of $0.19 per share, up 12% year-over-year.

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

• ROE at 19.4%, up 590bps, supported by BI release and strategic alliances.

Outlook and guidance

• FY 2026 guidance: existing businesses to grow at low to mid-single digits; retail Australia mid-single digits, intermediated Australia low single digits, New Zealand flat.

• Reported profit expected between $1.45 billion and $1.65 billion, insurance margin 14%-16%, excluding RACQ and RAC acquisitions.

• RACQ acquisition expected to complete in Q1 FY26, adding ~10% GWP growth.

• Perils allowance for FY 2026 increased by 2.6% to $1,316 million, reflecting exposure growth.

• Combined, RACQ and RACWA expected to add $3 billion in premium and at least $300 million in insurance profit, with double-digit EPS accretion.