Insurance Australia Group (IAG) H2 2024 earnings summary

Executive summary

• Net profit after tax rose 7.9% to AUD 898 million for FY24, with insurance profit up 79.1% to AUD 1,438 million and reported margin at 15.6%, above guidance.

• Gross written premium (GWP) increased 11.3% to AUD 16.4 billion, driven by premium increases and strong renewal rates.

• Declared a final dividend of AUD 0.17 per share (50% franked), total FY24 dividend AUD 0.27 per share, up 80% year-over-year.

• Announced a further on-market share buyback of up to AUD 350 million, following AUD 550 million completed in FY24.

• Strategic focus on customer support, operational efficiency, and technology investment to drive future growth.

Financial highlights

• Underlying insurance profit up 27.1% to AUD 1,337 million; underlying insurance margin improved to 14.5%.

• Cash earnings roughly doubled year-over-year, excluding the business interruption impact.

• Administration expense ratio ex-levies flat at 11.9%; total admin expenses up ~11% due to tech and compliance spend.

• Investment income on technical reserves was AUD 456 million at a 5.7% yield; shareholders' funds contributed AUD 286 million.

• Actual net perils costs of AUD 983 million, AUD 115 million below allowance, mainly due to favorable NZ experience.

Outlook and guidance

• FY25 guidance: premium growth mid- to high-single-digit, combining premium increases and direct customer volume growth.

• FY25 reported insurance profit expected at AUD 1.4–1.6 billion, with margin guidance of 13.5%–15.5%.

• Net natural perils costs for FY25 capped at AUD 1,283 million in over 90% of scenarios.

• Guidance assumes stable claims inflation, strong investment income, and no material reserve movements or macroeconomic shocks.

• Long-term targets include a 15% reported insurance margin and 14–15% ROE through the cycle.