Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — H1 2025 Earnings Presentation
33 slides from Insurance Australia's earnings presentation, Feb 13, 2025
Slide 1: Financial Results
This release has been authorised by the IAG Board Financial Results Half year ended 31 December 2024 13 February 2025 IAG
Slide 2: Important information
Important information This presentation contains general information current as at 13 February 2025 (unless otherwise stated) natural peril events causing losses to exceed forecasts, and uncertainties in the Australian and global and is not a recommendation or advice in relation to any product or se
Slide 3: Introduction
Nick Hawkins Managing Director and Chief Executive Officer Introduction IAG
Slide 4: 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. We show our support by empow
Slide 5: Making your world a safer place
Making your world a safer place Delivering on our purpose in 1H25 Helping customers when Building customer and Making Australia and New they need us most community resilience Zealand safer and stronger • Paid $5.2 billion in claims, helping • Helped over 740,000 people improve their • Successfully p
Slide 6: Strength and resilience for more Australians and New Zealanders
Strength and resilience for more Australians and New Zealanders Delivering outcomes Leading brands, high trust Meeting more customer needs, faster • NRMA Insurance #1 most trusted insurance • AI enablement brand in Australia, 3rd consecutive year* Leading • Communications simplification Trusted and
Slide 7: 1H25 result highlights
1H25 result highlights Net profit after tax Insurance profit Gross Written Premium $778m $957m $8.4bn Includes $140m post-tax Natural perils $215m Up 6.0% Business Interruption provision below allowance release Underlying Interim dividend Strong capital position insurance margin 15.1% 12cps 1.42 CET
Slide 8: ROEs impacted by perils over last years
ROEs impacted by perils over last 5 years – 1H25 favourable impact 18.7% 13.6% 12.0% Average 7.0% Cash ROE 9.1% Cash ROE 4.5% 3.4% FY20 FY21 FY22 FY23 FY24 1H25 215 115 Average Perils above(-)/below (+) ~$120m allowance ($m, pre-tax) -84 above allowance -263 -297 -354 FY20 FY21 FY22 FY23 FY24 1H25 I
Slide 9: Retail Insurance Australia
Retail Insurance Australia Key highlights • Solid 1H25 GWP growth driven by Motor ( 6.3%) and 476 Home ( 6.1%) 419 • Strong renewal rates– close to 90% in Motor and over 90% in 378 384 Home 326 • Reported insurance margin improved to 19.0% (1H24: 10.0%) 229 • Underlying insurance margin improved to
Slide 10: Intermediated Insurance Australia
Intermediated Insurance Australia Key highlights • GWP growth of 10.3% with strong growth in workers’ compensation, including impact of multi-year policies (~$80m) 181 171 • Lower reported insurance margin of 12.8% (1H24: 14.7%) but 153 149 152 stable underlying insurance margin of 11.5% (1H24: 11.5
Slide 11: New Zealand Retail
New Zealand Retail Key highlights • GWP up 3.2% to A$1,067m • NZ$ underlying GWP growth of ~8% adjusting for timing of premium processing changes. Impacted by a softening 192 economy resulting in modest volume loss • Strong reported insurance margin of 30.5% (1H24: 22.3%), 135 following benign peril
Slide 12: New Zealand Intermediated
New Zealand Intermediated Key highlights • GWP decline by 1.2% to A$820m 129 • NZ$ GWP growth of ~1% 119 • Strong reported insurance profit margin of 26.0% (1H24: 100 18.8%) 81 77 • Underlying insurance margin of 16.8% (1H24: 15.5%) 67 • Retained 34 of 35 large accounts during most recent renewals •
Slide 13: Financials
William McDonnell Chief Financial Officer Financials IAG
Slide 14: Financial summary
Financial summary 1H24 1H25 Change GWP ($m) 7,947 8,426 6.0% NEP ($m) 4,496 4,930 9.7% Administration expense ratio ex-levies (%) 12.2 11.9 30bps Reported insurance profit ($m) 614 957 55.9% Reported insurance margin (%) 13.7 19.4 570bps Underlying insurance profit ($m) 614 747 21.7% Underlying insu
Slide 15: Solid top-line growth
Solid top-line growth Reported 1H25 GWP growth of 6.0%: Group GWP, GEP & NEP growth (%) (underlying growth ~7%1) • Ongoing premium increases reflecting moderating claims inflation and increased perils allowance 10.8% • Strong renewal rates for direct channels in Australia and 9.7% New Zealand • Rela
Slide 16: Increased underlying insurance margin
Increased underlying insurance margin Underlying insurance margin improved to Underlying insurance margin 15.1% (1H24: 13.7%): • Increased perils allowance to $641m (1H24: $549m) 3.0% 0.1% 15.1% -0.9% • 300bps underlying claims ratio improvement 13.7% -0.8% • Expense ratio decrease to 23.6% (1H24: 2
Slide 17: Improvement in underlying claims ratio
Improvement in underlying claims ratio Drivers of 300bps improvement in underlying Underlying claims ratio claims ratio • Moderating claims inflation, particularly in New Zealand • Improved supply chain and motor repair network 55.6% -160bps capacity and benefit from lower total loss motor claims 54
Slide 18: Favourable perils experience and strong reinsurance protection
Favourable perils experience and strong reinsurance protection 1H25 net perils costs of $426m, Catastrophe reinsurance program $215m below allowance $m • One major event of $53m in August 2024 10,000 • Continue to adopt prudent reserving approach reflecting Hunter Hail experience Major catastrophe p
Slide 19: Improvement in administration expense ratio
Improvement in administration expense ratio 1H25 admin ratio ex-levies 30bps Administration ratio ex-levies improvement compared to 1H24 -30bps • Administration expenses ex-levies up 5.1% including higher technology costs including amortisation 12.2 11.9 11.6 • Proportionally greater increase in cos
Slide 20: Strong investment result across all asset classes
Strong investment result across all asset classes Technical reserves income Shareholders’ funds income (~$7bn portfolio) (~$6bn portfolio) $290m $166m $227m $147m $139m $217m 46 31 13 33 20 67 28 Underlying 60 213 208 202 yield of 5.5% 125 130 94 -8 -6 -15 -55 1H24 2H24 1H25 1H24 2H24 1H25 Underlyin
Slide 21: Strong CET1 capital position
Strong CET1 capital position 0.04 0.29 -0.03 1.42 -0.04 0.05 1.27 -0.11 -0.15 -0.01 1.09 -0.22 0.9 to 1.1 CET1 target range Jun-24 Long-term perils FY24 final ~$37m buyback 1H25 Decrease in Software Growth & other Dec-24 FY25 interim RACQI acquisition Dec-24 Proforma volatility protection dividend E
Slide 22: Guidance & Outlook
Nick Hawkins Managing Director and Chief Executive Officer Guidance & Outlook IAG
Slide 23: FY25 guidance
FY25 guidance1 Reported insurance profit of $1,400m to $1,600m, Reported insurance margin of 13.5% to 15.5% which assumes: which, based on the factors above, is expected to be towards the top of the range. • FY25 natural peril costs of $1,283 million with 2H25 costs of $857 million (1H25: $426 milli
Slide 24: IAG is well positioned for growth now and into the future
IAG is well positioned for growth now and into the future Scalable business set to expand Improving efficiency beyond our 7.2m customers and margin Direct Partner Intermediated Australia New Zealand Australia New Zealand Australia New Zealand Efficient Capital Platform IAG 13 February 2025 Financial
Slide 25: Financial Results
Financial Results Half year ended 31 December 2024 13 February 2025 IAG
Slide 26: Investor Relations Media Insurance Australia Group Limited
Investor Relations Media Insurance Australia Group Limited Mark Ley Amanda Wallace ABN 60 090 739 923 M: +61 (0)411 139 134 M: +61 (0)422 379 964 Level 9, Tower Two, 201 Sussex Street E: mark.ley@iag.com.au E: amanda.wallace@iag.com.au Sydney NSW 2000 Australia Ph: +61 (0)2 9292 9222 Nigel Menezes M
Slide 27: Appendix 1. Group Profit & Loss
Appendix 1. Group Profit & Loss 1H24 2H24 1H25 GROUP RESULTS A$m A$m A$m Gross written premium 7,947 8,453 8,426 Gross earned premium 7,550 7,875 8,366 Reinsurance expense (3,054) (3,127) (3,436) Net earned premium 4,496 4,748 4,930 Net claims expense (3,108) (2,987) (3,039) Commission expense (418)
Slide 28: Appendix 2. Group Insurance Ratios
Appendix 2. Group Insurance Ratios Insurance Ratios 1H24 2H24 1H25 Loss ratio 69.1% 62.9% 61.6% Immunised loss ratio 68.5% 63.7% 61.3% Expense ratio 23.7% 23.2% 23.6% Commission ratio 9.3% 9.3% 9.2% Administration ratio 14.4% 13.9% 14.4% Administration ex levies ratio 12.2% 11.6% 11.9% Combined rati
Slide 29: Appendix 3. RIA Profit & Loss and Insurance Ratios
Appendix 3. RIA Profit & Loss and Insurance Ratios 1H24 2H24 1H25 RETAIL INSURANCE AUSTRALIA A$m A$m A$m Gross written premium 4,058 4,264 4,305 Gross earned premium 3,769 3,999 4,242 Reinsurance expense (1,486) (1,568) (1,729) Net earned premium 2,283 2,431 2,513 Net claims expense (1,758) (1,643)
Slide 30: Appendix 4. IIA Profit & Loss and Insurance Ratios
Appendix 4. IIA Profit & Loss and Insurance Ratios 1H24 2H24 1H25 INTERMEDIATED INSURANCE AUSTRALIA A$m A$m A$m Gross written premium 2,025 2,257 2,233 Gross earned premium 2,072 2,080 2,225 Reinsurance expense (840) (817) (895) Net earned premium 1,232 1,263 1,330 Net claims expense (780) (776) (84
Slide 31: Appendix 5. NZ Profit & Loss and Insurance Ratios
Appendix 5. NZ Profit & Loss and Insurance Ratios 1H24 2H24 1H25 NEW ZEALAND A$m A$m A$m Gross written premium 1,864 1,932 1,887 Gross earned premium 1,709 1,796 1,898 Reinsurance expense (728) (742) (812) Net earned premium 981 1,054 1,086 Net claims expense (570) (567) (533) Commission expense (11
Slide 32: Appendix 6. NZ Retail Profit & Loss and Insurance Ratios
Appendix 6. NZ Retail Profit & Loss and Insurance Ratios 1H24 2H24 1H25 NEW ZEALAND - RETAIL A$m A$m A$m Gross written premium 1,034 1,041 1,067 Gross earned premium 919 959 1,057 Reinsurance expense (368) (375) (428) Net earned premium 551 584 629 Net claims expense (342) (359) (330) Commission exp
Slide 33: Appendix 7. NZ Intermediated Profit & Loss and Insurance Ratios
Appendix 7. NZ Intermediated Profit & Loss and Insurance Ratios 1H24 2H24 1H25 NEW ZEALAND - INTERMEDIATED A$m A$m A$m Gross written premium 830 891 820 Gross earned premium 790 837 841 Reinsurance expense (360) (367) (384) Net earned premium 430 470 457 Net claims expense (228) (208) (203) Commissi
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