Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Merger or Acquisition (May 2025)
25 slides from Insurance Australia's merger presentation, May 15, 2025
Slide 1: IAG enters strategic alliance with The Royal Automobile Club of Western Australia
ASX Release 15 May 2025 IAG enters strategic alliance with The Royal Automobile Club of Western Australia Supporting WA RAC transaction financials Financial update • Trusted RAC brand continues • Additional ~$1.5bn GWP • RAC & RACQ combined • Benefits for 1.3m members • $100m pre-tax annual increase
Slide 2: ASX Release: transaction summary and key terms
"Our alliance with RAC will draw on our proven track record with successful motoring club partnerships and help us keep more Western Australians safe through competitive, accessible and high-value insurance products and services. “RAC and its members will benefit from our financial stability, advanc
Slide 3: Funding, completion, FY25 perils and GWP update
The transaction will be funded from existing surplus capital, debt and strong, stable organic capital generation. The transaction is subject to conditions including Australian Competition and Consumer Commission clearance and approval under the Financial Sector (Shareholdings) Act 1998. Subjec
Slide 4: About IAG
About IAG IAG is the parent company of a general insurance group with operations in Australia and New Zealand. IAG’s main businesses underwrite over $16 billion of insurance premium per annum under many leading brands, including: NRMA Insurance, RACV (under a distribution agreement with RACV), CGU a
Slide 5: IAG enters strategic alliance with RAC
IAG enters strategic alliance with RAC 15 May 2025 1
Slide 6: Important Information
Important Information This presentation contains general information current as at 15 May 2025 (unless otherwise stated) and looking statements to be reasonable, such statements involve risks (both known and unknown) and is not a recommendation or advice in relation to any product or service offered
Slide 7: Nick Hawkins, Managing Director and Chief Executive Officer
Nick Hawkins Managing Director and Chief Executive Officer
Slide 8: Acknowledgement of Country
Acknowledgement of Country IAG acknowledges Traditional Owners of Country throughout Australia and recognises the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures and to Elders past and present. IAG enters strategic alliance
Slide 9: Agenda
Agenda Transaction overview and Nick Hawkins strategic rationale RACI portfolio and integration Julie Batch plan Financial impacts and capital William McDonnell Conclusion Nick Hawkins IAG enters strategic alliance with RAC 5
Slide 10: Exclusive strategic alliance with RAC
Exclusive strategic alliance with RAC • IAG today announced it will enter a strategic partnership with The Royal Automobile Club of Western Australia (“RAC”) which includes: — Sale of the RAC Insurance (“RACI”) entity and existing underwriting insurance business to IAG Transaction — 20-year exclusiv
Slide 11: A compelling strategic alliance with RAC
A compelling strategic alliance with RAC 1 2 3 4 5 RAC is a highly trusted Western Builds on IAG’s successful RACI has a De-Risked Integration Australian brand, with a history with motoring complementary personal Strong financial outcomes Plan high-quality insurance club partnerships lines portfolio
Slide 12: RAC is a highly trusted Western Australian brand, with a quality insurance business
1 RAC is a highly trusted Western Australian brand, with a quality insurance business • Strong member engagement demonstrated by member retention (92%) with an average of 2.9 products per member1 Aggregated NPS2 • Net promoter score of 662 with a long-standing presence in Western Australia since 190
Slide 13: Julie Batch: RACI portfolio and integration plan
Julie Batch CEO, Retail Insurance Australia RACI portfolio and integration plan
Slide 14: Builds on IAG’s successful history of motoring club partnerships
2 Builds on IAG’s successful history of motoring club partnerships ~1.3m members ~1.7m members ~3.3m members ~2.3m members ~20k members NT • IAG heritage built on 100 years of supporting mutual motoring members WA • IAG brings national scale, global reinsurance capability and industry-leading QLD te
Slide 15: RACI has a complementary personal lines portfolio
3 RACI has a complementary personal lines portfolio RACI GWP ($m) Portfolio Composition 3 ~1,500 CAGR 22% from FY22 to FY24 Motor 1,329 • Largely consists of Comprehensive 4 Motor products, with the remainder 1,064 Third Party Property1 11 457 895 • Retention rate of ~80%2 367 308 Home • Largely con
Slide 16: De-risked integration plan
4 De-risked integration plan Pre-Completion Post-completion Transactional, Operational and Financial Activity (9-12 months) (0-24 months post-completion) • Regulatory and government engagement • Roll-out IAG’s Enterprise Platform to RAC, de- risking technology integration • Develop detailed Day 1 sy
Slide 17: William McDonnell: Financial impacts and capital
William McDonnell Chief Financial Officer Financial impacts and capital
Slide 18: Strong financial outcomes
5 Strong financial outcomes Financial Outcomes Synergies • Upfront cash consideration of $1,350 million1 based on: Annual Run-rate Synergies (Pre-tax) o payment for the shares equivalent to the expected net tangible asset value at time of completion $400 million; and o upfront payment of $950 millio
Slide 19: Positive organic capital generation with strong downside protections
Positive organic capital generation with strong downside protections Indicative pro-forma CET1 ratio 0.11 ~0.05-0.10 0.22 0.25 0.40 1.10 Target CET1 range 0.90 1.42 1.40 1.09 1.00 31 Dec ’24 FY25 Interim RACQ acquisition 31 Dec ’24 Organic capital Other expected 30 Jun ’26 RAC (WA) acquisition 30 Ju
Slide 20: Significant growth over the last 5 years with demonstrated capital efficiency
Significant growth over the last 5 years with demonstrated capital efficiency Gross Written Premium per shares on issue Capital efficiency $m $m $ ~62% increase FY21- ~500bps decrease FY21- 9.0 FY26e 25,000 35% FY26e 25,000 8.6 8.0 7.3 30% 7.0 ~8% increase FY15-FY20 6.9 20,000 28% ~800bps decrease F
Slide 21: Conclusion
Nick Hawkins Managing Director and Chief Executive Officer Conclusion
Slide 22: Supporting ~10m customers with leading brands across Australia & New Zealand
Supporting ~10m customers with leading brands across Australia & New Zealand Retail – GWP ~$14.5bn Intermediated – GWP ~$6.5bn Direct Partner Australia New Zealand Australia New Zealand Australia New Zealand Organic and inorganic growth enabled by Efficiency improvement accelerated by Retail Enterpr
Slide 23: Investor Relations
Investor Relations Mark Ley Nigel Menezes Mobile. +61 (0)411 139 134 Mobile. +61 (0)411 012 690 Email. mark.ley@iag.com.au Email. nigel.menezes@iag.com.au Media Amanda Wallace Mobile. +61 (0)422 379 964 Email. amanda.wallace@iag.com.au Insurance Australia Group Limited ABN 60 090 739 923 Level 9, To
Slide 24: Appendices
Appendices
Slide 25: RACI summary P&L
RACI summary P&L Normalised Income Statement A$m FY22 FY23 FY24 HY251 Gross written premium 894.6 1,064.3 1,329.3 720.7 Net earned premium 762.0 878.3 1,070.1 628.2 Underwriting result 59.1 60.6 103.7 99.1 Investment income on policy holder (3.0) 7.3 19.1 12.5 funds Insurance profit/(loss) 56.1 67.9
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