Stock Track | Insurance Australia Group Plummets 6.08% as Full-Year Earnings Miss Estimates on Elevated Weather Claims

Stock Track
Aug 13

Shares of Insurance Australia Group (IAG) plummeted 6.08% in intraday trading on Thursday, following the release of its full-year results that showed a sharp decline in cash earnings and net profit, driven by a surge in natural perils claims and lower investment income.

The company reported cash earnings of A$1.03 billion for the year ended June 30, down 12.6% from A$1.17 billion a year earlier and below the Visible Alpha consensus estimate of A$1.07 billion. Net profit after tax fell 24.8% to A$1.02 billion, while net claims expenses rose approximately 8% to A$6.84 billion, pushing the loss ratio 160 basis points higher to 65.0%. Total net investment income declined to A$629 million from A$867 million.

IAG handled 65 severe weather events in Australia during the year, paying more than A$12.4 billion in claims, which weighed heavily on its insurance margin. The company also provided FY27 guidance, targeting a reported insurance margin of 14.5% to 16.5% and gross written premium growth of 5% to 8%, but the weaker-than-expected annual performance overshadowed the outlook.

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