ASX:IAG

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Insurance Australia Group

Executive Summary

Insurance Australia Group Limited underwrites general insurance products in Australia and New Zealand. More Details


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Insurance Australia Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IAG is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: IAG's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-2.6%

IAG

2.1%

AU Insurance

1.7%

AU Market


1 Year Return

-32.6%

IAG

-20.3%

AU Insurance

-1.6%

AU Market

Return vs Industry: IAG underperformed the Australian Insurance industry which returned -20.3% over the past year.

Return vs Market: IAG underperformed the Australian Market which returned -1.6% over the past year.


Shareholder returns

IAGIndustryMarket
7 Day-2.6%2.1%1.7%
30 Day12.5%15.7%9.5%
90 Day8.8%4.3%9.2%
1 Year-31.6%-32.6%-18.1%-20.3%1.8%-1.6%
3 Year-16.4%-27.1%-5.4%-17.0%24.8%9.2%
5 Year18.8%-8.1%16.2%-7.9%56.1%25.0%

Long-Term Price Volatility Vs. Market

How volatile is Insurance Australia Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Insurance Australia Group undervalued compared to its fair value and its price relative to the market?

27.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: IAG (A$5.32) is trading above our estimate of fair value (A$2.83)

Significantly Below Fair Value: IAG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: IAG is poor value based on its PE Ratio (27.9x) compared to the AU Insurance industry average (26.3x).

PE vs Market: IAG is poor value based on its PE Ratio (27.9x) compared to the Australian market (22.6x).


Price to Earnings Growth Ratio

PEG Ratio: IAG is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: IAG is good value based on its PB Ratio (2x) compared to the AU Insurance industry average (3.1x).


Next Steps

Future Growth

How is Insurance Australia Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

32.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IAG's forecast earnings growth (32.9% per year) is above the savings rate (2.3%).

Earnings vs Market: IAG's earnings (32.9% per year) are forecast to grow faster than the Australian market (17.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: IAG's revenue (1.6% per year) is forecast to grow slower than the Australian market (5% per year).

High Growth Revenue: IAG's revenue (1.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IAG's Return on Equity is forecast to be low in 3 years time (11.9%).


Next Steps

Past Performance

How has Insurance Australia Group performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IAG has high quality earnings.

Growing Profit Margin: IAG's current net profit margins (6.1%) are lower than last year (11.2%).


Past Earnings Growth Analysis

Earnings Trend: IAG's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: IAG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: IAG had negative earnings growth (-49.6%) over the past year, making it difficult to compare to the Insurance industry average (-33.8%).


Return on Equity

High ROE: IAG's Return on Equity (7.6%) is considered low.


Next Steps

Financial Health

How is Insurance Australia Group's financial position?


Financial Position Analysis

Short Term Liabilities: IAG's short term assets (A$13.0B) do not cover its short term liabilities (A$14.2B).

Long Term Liabilities: IAG's short term assets (A$13.0B) exceed its long term liabilities (A$8.8B).


Debt to Equity History and Analysis

Debt Level: IAG's debt to equity ratio (22.8%) is considered satisfactory.

Reducing Debt: IAG's debt to equity ratio has reduced from 24.4% to 22.8% over the past 5 years.

Debt Coverage: IAG's debt is well covered by operating cash flow (25%).

Interest Coverage: IAG's interest payments on its debt are well covered by EBIT (6.3x coverage).


Balance Sheet


Next Steps

Dividend

What is Insurance Australia Group current dividend yield, its reliability and sustainability?

4.18%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate IAG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate IAG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if IAG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if IAG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: IAG is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of IAG's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Nick Hawkins (52 yo)

no data

Tenure

AU$2,433,000

Compensation

Mr. Nicholas B. Hawkins, also known as Nick, BCom, CA, FCA, serves as Deputy Chief Executive Officer at Insurance Australia Group Ltd. since April 08, 2020. He served as Chief Financial Officer of Insuranc...


CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD1.79M) is about average for companies of similar size in the Australian market ($USD2.52M).

Compensation vs Earnings: Nick's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nicholas Hawkins
MD, CEO & Directorno dataAU$2.43m0.014%
A$ 1.8m
Michelle McPherson
Group Chief Financial Officer0.58yrAU$1.02m0.000020%
A$ 2.5k
Christine Stasi
Group Executive of People1.33yrsAU$1.08mno data
Julie Batch
Chief Strategy & Innovation Officer and Acting Group Executive Intermediated Insurance Australia4.92yrsAU$1.46m0.010%
A$ 1.3m
Craig Olsen
Chief Executive of New Zealand4.92yrsAU$1.60m0.0084%
A$ 1.1m
David Watts
Chief Risk Officer2.17yrsAU$1.52m0.000010%
A$ 1.3k
Neil Morgan
Group Executive Technology & Operationsno datano datano data
Simon Phibbs
Senior Manage of Investor Relationsno datano datano data
Peter Horton
Group General Counsel & Company Secretary0.92yrno datano data
Brent Smart
Chief Marketing Officer3.75yrsno datano data
Daniel Coman
Deputy Chief Financial Officer4.83yrsno datano data
Peter Bonney
Head of Disruptive Technology & Architecture for Iag Digital Labs5.83yrsno datano data

3.8yrs

Average Tenure

Experienced Management: IAG's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nicholas Hawkins
MD, CEO & Directorno dataAU$2.43m0.014%
A$ 1.8m
Helen Nugent
Independent Non-Executive Director3.92yrsAU$243.00k0.0014%
A$ 179.5k
Duncan Boyle
Independent Non-Executive Director3.92yrsAU$292.00k0.0014%
A$ 178.2k
George Savvides
Independent Non-Executive Director1.42yrsAU$244.00k0.0015%
A$ 191.0k
Simon Allen
Independent Non Executive Director1yrAU$242.00kno data
Elizabeth Bryan
Independent Chairman of the Board4.67yrsAU$755.00k0.0043%
A$ 547.4k
Thomas Pockett
Independent Non-Executive Director5.83yrsAU$267.00k0.0014%
A$ 179.5k
Sheila McGregor
Independent Non-Executive Director2.67yrsAU$230.00k0.0012%
A$ 150.2k
Jonathan Nicholson
Independent Non-Executive Director5.17yrsAU$267.00k0.0015%
A$ 188.4k
Michelle Tredenick
Independent Non-Executive Director2.67yrsAU$230.00k0.00079%
A$ 100.6k

3.9yrs

Average Tenure

63yo

Average Age

Experienced Board: IAG's board of directors are considered experienced (3.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: IAG insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.6%.


Top Shareholders

Company Information

Insurance Australia Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Insurance Australia Group Limited
  • Ticker: IAG
  • Exchange: ASX
  • Founded: 1925
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: AU$12.730b
  • Shares outstanding: 2.41b
  • Website: https://www.iag.com.au

Number of Employees


Location

  • Insurance Australia Group Limited
  • Tower Two
  • Level 13
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IAUG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDAug 2000
IAGASX (Australian Securities Exchange)YesOrdinary SharesAUAUDAug 2000
NRMDB (Deutsche Boerse AG)YesOrdinary SharesDEEURAug 2000
IAGCHIA (Chi-X Australia)YesOrdinary SharesAUAUDAug 2000
IAUG.YOTCPK (Pink Sheets LLC)UNSPNSRD ADS NEWUSUSDOct 2008
IAGPDASX (Australian Securities Exchange)FRN CNV PERP AUD5000 'REGS'AUAUDFeb 2017

Biography

Insurance Australia Group Limited underwrites general insurance products in Australia and New Zealand. The company offers consumer insurance products, including motor vehicle, home and contents, business p...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/27 07:01
End of Day Share Price2020/11/27 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.