Update shared on 20 Nov 2025
Analysts have reiterated their fair value estimate for Insurance Australia Group at $8.95, citing stable revenue projections and modest improvements in projected profit margins, even with a slightly higher discount rate.
What's in the News
- Insurance Australia Group revised its earnings guidance for fiscal 2026, reflecting stronger anticipated performance.
- Gross written premium (GWP) growth for 2026 is now expected to reach approximately 10 percent, which is higher than the previously projected low-to-mid single digit range.
- The updated outlook also includes the results of RACQ Insurance (RACQI) starting from 1 September 2025.
- Reported insurance profit guidance has increased by AUD 100 million, with expectations now between AUD 1,550 million and AUD 1,750 million for the year. (Key Developments)
Valuation Changes
- Fair Value: Remains unchanged at A$8.95 per share.
- Discount Rate: Increased slightly from 6.48% to 6.67%.
- Revenue Growth: No notable change, staying around negative 10.78%.
- Net Profit Margin: Marginal improvement, rising from 9.58% to 9.59%.
- Future P/E: Increased slightly from 21.40 times to 21.51 times.
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