Fund Manager Summary
The fund managers believe that Insurance Australia Group Ltd (IAG) presents a compelling investment opportunity given its status as the largest general insurer in Australia and New Zealand. They view IAG as a defensive exposure in the current economic climate, supported by robust fiscal spending and limited tariff exposure. Despite concerns over pricing adjustments in the home and motor insurance segments, discussions indicate that pricing growth is stabilizing in the mid-to-high single digit range, aligning with inflation. The managers are confident in IAG's revenue and margin outlook, bolstered by potential improvements in cost ratios through recent technology investments and strategic acquisitions. Furthermore, IAG's lower interest rate exposure compared to peers positions it favorably should economic conditions worsen.
Source: Trading View
Commentary From The Managers
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Pendal Group
27 Oct 2025
$7.96
Summary
- Pendal Group continues to hold its position in Insurance Australia Group Ltd (IAG).
- IAG has upgraded FY26 guidance following the acquisition of RAC Queensland.
- Gross written premium growth is now expected to be around 10%, an increase from the previous low-to-mid single digit forecast.
- Insurance profit guidance has been raised to $1,550-1,750m, reflecting a $100m upward revision.
- The market consensus was already aligned with these updates, as the acquisition was completed on 1st September.
- RACQ is performing well, tracking at a margin similar to the broader group at approximately 15%.
- Reinsurance synergies from the acquisition are expected to take time to materialize.
- There was limited information on broader operating trends, but the market remains competitive and weather conditions were reported as benign in 1Q.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
27 Oct 2025
$7.96
- Pendal Group continues to hold its position in Insurance Australia Group Ltd (IAG).
- IAG has upgraded FY26 guidance following the acquisition of RAC Queensland.
- Gross written premium growth is now expected to be around 10%, an increase from the previous low-to-mid single digit forecast.
- Insurance profit guidance has been raised to $1,550-1,750m, reflecting a $100m upward revision.
- The market consensus was already aligned with these updates, as the acquisition was completed on 1st September.
- RACQ is performing well, tracking at a margin similar to the broader group at approximately 15%.
- Reinsurance synergies from the acquisition are expected to take time to materialize.
- There was limited information on broader operating trends, but the market remains competitive and weather conditions were reported as benign in 1Q.
Summary
Firetrail Investments
30 Sept 2025
$8.20
- Firetrail Investments continues to hold a position in Insurance Australia Group Ltd (IAG).
- Leading general insurance provider IAG shares have underperformed amid broader sector weakness.
- In September, the ACCC raised preliminary issues regarding the proposed strategic alliance with the Royal Automobile Club of WA (RAC).
- The approval of the RAC deal is not a core feature of Firetrail Investments' investment thesis for IAG.
- Nonetheless, Firetrail Investments believes the deal will ultimately proceed.
Summary
Equity Trustees Asset Management
30 Sept 2025
$8.20
- Equity Trustees Asset Management sold their investment in IAG Insurance (IAG).
- IAG is Australasia's leading general insurance group, offering personal and commercial insurance products.
- The earnings of IAG have more than doubled from their lowest point.
- The favorable insurance market conditions benefiting IAG for the past three years have largely diminished.
- The stock valuation multiple for IAG has expanded.
- The earnings growth outlook for IAG is now considered less attractive.
- Overall, the risk/reward trade-off for IAG has become less favorable.
Summary
Wilson Asset Management
12 Sept 2025
$8.67
- Wilson Asset Management continues to hold a positive view on Insurance Australia Group Ltd (IAG).
- IAG faced challenges due to back-to-back La Niña events and rising inflation in claims costs.
- Despite these challenges, Milne emphasizes that IAG is a leading franchise in the insurance sector.
- Weather-related events are unpredictable, indicating potential for recovery.
- The stock price has rebounded from around $4 to $9, suggesting resilience.
- Currently, IAG is viewed as more fairly valued in the market.
Summary
Yarra Capital Management
31 July 2025
$8.77
- Yarra Capital Management continues to hold an overweight position in Insurance Australia Group (IAG).
- IAG was a modest underperformer during the period, attributed to limited company-specific news.
- Yarra views IAG as a quality business with strong market positions in personal insurance lines.
- The company operates in growing end-markets, enhancing its long-term prospects.
- IAG benefits from technology and efficiency advantages compared to its peers.
Summary
Pendal Group
30 Apr 2025
$8.21
- Centennial Asset Management believes Zip has the potential to rally in the short term.
- Zip is well positioned to deliver further strong growth in revenues and profitability.
- The US buy now, pay later market remains relatively immature, allowing Zip’s US footprint to grow rapidly.
- New product launches are expected to contribute to the company’s transaction volumes and earnings growth in the coming year.
- Zip’s balance sheet strength and ongoing buyback are expected to support share price performance.
- Zip has surprised the market with better-than-expected earnings over the past year.
- The company has upgraded expectations post the most recent quarter, indicating potential for additional upside earnings risk.
Summary
Pengana Capital Group
28 Apr 2025
$8.06
- Pengana Capital Group highlights the significant valuation underpinning provided by after-tax free cash flows in IAG.
- Research has often led to investment opportunities without impacting the medium-term value of the business.
- IAG delivered a strong and conservative insurance result, showcasing its robust performance.
- Management, likely considering the upcoming election, chose not to upgrade their earnings outlook.
- Momentum players reacted to perceived peaks in the short-term insurance cycle, leading to a significant sell-off of the company.
- A detailed analysis of IAG's balance sheet revealed the conservative nature of its underlying earnings.
- This analysis allowed Pengana Capital Group to accumulate a material position in IAG at an attractive price.
Summary
Milford Asset Management
28 Feb 2025
$7.90
- Milford Asset Management notes that Insurer IAG experienced a decline of -12.4% following results indicating a slowing premium growth environment.
- The market reacted negatively, leading to a punishment of their shares.
- Over the past few years, insurers have performed well for the Fund.
- As the insurance cycle matures, Milford Asset Management has been reducing holdings in this sector over the last six months.
Summary
Perpetual Asset Management
28 Feb 2025
$7.90
- Perpetual Asset Management notes that Insurance Australia Group (IAG) experienced a share price decline of -12.8% despite reporting strong net profit after tax.
- The company has guided towards a slower rate of premium growth in the second half, indicating a potential end to the strong pricing environment.
- There remains an opportunity for IAG to continue reducing costs, even as premium growth moderates.
- Easing claims inflation is expected to create an environment conducive to ongoing earnings growth.
- Perpetual Asset Management views IAG's Adverse Development Cover (ADC) strategy positively, which aims to protect existing reserves from significant fluctuations.
- A reinsurance arrangement focused on natural perils provides additional protection against unpredictable weather-related costs.
- This layered protection, while introducing upfront costs, is anticipated to reduce financial impacts over time.
- The strategy is expected to moderate earnings volatility, protect target margins, and enhance long-term returns by lowering capital strain.
Summary
Wilson Asset Management
31 Jan 2025
$9.20
- Insurance Australia Group is the largest general insurance provider in Australia and New Zealand, operating under multiple brands, including NRMA Insurance.
- In January, the company delivered positive updates, successfully placing its catastrophe reinsurance program.
- IAG released $200 million from its Business Interruption provision.
- As a result, IAG now holds significant excess capital, which could be used for further acquisitions or returned to shareholders.
- The first half of FY2025 is confirmed as a period of mild weather.
Summary
Perpetual Asset Management
31 Jan 2025
$9.20
- Insurance Australia Group continues to contribute positively to performance.
- The market is rewarding the RACQ deal, indicating potential for IAG to reduce capital demands.
- IAG's strategy includes an Adverse Development Cover (ADC) to shield existing reserves from fluctuations.
- A reinsurance arrangement focuses on natural perils, providing a buffer against unpredictable weather-related costs.
- This arrangement is structured to cover most expected scenarios, helping to stabilize claims expenses.
- Although layered protection incurs upfront costs, it is expected to reduce financial impact over time.
- This strategy aims to moderate earnings volatility, protect target margins, and enhance long-term returns by lowering capital strain.
Summary
Yarra Capital Management
31 Dec 2024
$8.46
- Yarra Capital Management continues to hold a positive outlook on Insurance Australia Group (IAG) due to its recent strong financial performance.
- IAG reported an 11% increase in net earned premiums, reaching $9.2 billion.
- The company achieved a pre-tax insurance profit of $1.4 billion, reflecting robust operational efficiency.
- IAG announced a $350 million share buyback plan, signaling confidence in its financial health.
- The acquisition of a 90% stake in RACQ’s insurance arm for $855 million is expected to enhance growth prospects.
- This acquisition is projected to boost gross written premiums by $1.3 billion and strengthen IAG's market presence in Queensland.
Summary
Equity Trustees Asset Management
30 June 2024
$7.11
- IAG’s margins are expected to continue to expand through into FY25.
- Recent inflation data shows personal lines pricing still well in double digit territory.
- Pricing is ahead of claims inflation, supporting strong profit growth.
- Industry feedback remains supportive of a “hard” market in the insurance industry.
- Industry players are acting rationally.
- Re-insurance headwinds appear to be easing.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
In a landscape of uncertainty, positioning in Insurance Australia Group Ltd appears to blend resilience with opportunity. As fiscal support persists and pricing stabilizes, IAG may well emerge as a defensive asset amidst potential global headwinds.
Last Updated: 27 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Insurance Australia Group Ltd (ASX:IAG)?
Fund managers including Pendal Group, Equity Trustees Asset Management, Yarra Capital Management, Pengana Capital Group, Milford Asset Management, Wilson Asset Management, Perpetual Asset Management and Firetrail Investments have invested in Insurance Australia Group Ltd (ASX:IAG).
Why do fund managers invest in Insurance Australia Group Ltd?
Fund managers invest in Insurance Australia Group Ltd (IAG) due to its position as the largest general insurer in Australia and New Zealand, offering a diverse range of personal and commercial insurance products. IAG is viewed as a defensive investment amid a resilient domestic economy, bolstered by fiscal spending and potential interest rate cuts. Recent share price pullbacks provided a favorable entry point, and concerns over pricing and reinsurance costs have been alleviated through positive company insights. The outlook for revenue and margins is promising, with opportunities for cost improvements and strategic acquisitions, such as partnerships with motoring clubs, enhancing IAG's market presence.
What happened to Insurance Australia Group Ltd (ASX:IAG)?
Fund managers view Insurance Australia Group Ltd (IAG) as a quality general insurer with strong positions in personal insurance and growth potential. Despite recent underperformance and market challenges, IAG's acquisition of RAC Queensland and upgraded financial guidance signal positive growth prospects. While some managers have expressed concerns about valuation and market conditions, the overall sentiment remains optimistic due to IAG's operational efficiency and market leadership.