Australia’s Insurance Australia Group (IAG) said it could push further premium increases after reporting a sharp jump in annual profit, helped by higher pricing, better investment income and catastrophe costs that came in below budget. Management is guiding to low–mid single-digit GWP growth in FY26 and a reported insurance profit range of A$1.45–1.65 bn.
| FY25 NPAT | ~A$1.36 bn, up ~51% YoY |
|---|---|
| Net earned premium | A$9.98 bn, +8% YoY |
| Insurance profit & margin | A$1.74 bn; reported margin **17.5%** |
| Catastrophe/perils | A$1.09 bn, ~A$195 mn **below** allowance |
| Dividend | Final **19c**; full-year **31c** (up ~15%) |
| FY26 outlook | Reported insurance profit **A$1.45–1.65 bn**; GWP growth **low–mid single digits** |
What IAG said about pricing
Local coverage quotes IAG (parent of NRMA Insurance) as flagging more premium hikes even after FY25’s strong recovery, while cautioning that New Zealand’s weaker economy could temper growth. Management also lifted the natural-perils budget for FY26.
Analysts note FY25’s earnings power was driven by rate increases, lower-than-expected catastrophe losses, and operational improvements; several broker notes see scope for IAG to deliver toward the upper half of guidance if pricing remains firm and weather stays benign.
By the numbers (FY25 snapshot)
- Net profit: A$1,359 mn vs A$898 mn in FY24 (↑51%).
- Net earned premium: A$9.98 bn (↑8%).
- Insurance profit: A$1.743 bn; reported margin 17.5%.
- Perils: A$1.088 bn, ~A$195 mn under allowance.
- Dividends: Final 19c; FY total 31c (↑~15%).
Why this matters for Indian readers
- Global pricing signal: Big APAC general insurers’ rate cycles often flow through to reinsurance pricing used by Indian carriers. If IAG keeps pushing price, it supports a firmer regional rating environment.
- Claims & catastrophes: FY25 benefitted from below-budget catastrophe losses; if FY26 weather turns harsher, insurers across the region (including India) could face higher reinsurance costs and premium pass-throughs.
What to watch next
- Pricing momentum: Evidence of additional rate increases in Australian personal and commercial lines through FY26.
- Guidance track: Whether IAG trends toward the top end of the A$1.45–1.65 bn insurance-profit range.
- M&A & partnerships: Integration of RACQ alliance and any movement on RAC (WA); management commentary ties these to potential A$3 bn GWP uplift longer term.
- Cat budgets: The raised perils allowance is a tell on risk—watch how actuals trend vs budget in peak seasons.
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