Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Presentation (June 2024)
22 slides from Insurance Australia's investor presentation, Jun 7, 2024
Slide 1: ASX cover letter
7 June 2024 Manager, Company Announcements Office ASX Limited Level 4, Exchange Centre 20 Bridge Street Sydney NSW 2000 For personal use only Dear Sir / Madam, The attached presentation will be used for international investor meetings during June. The information on the majority of slides (6, 8-10,
Slide 2: Introduction to IAG
For personal use only Introduction to IAG June 2024 Introduction to IAG | June 2024
Slide 3: Important information
Important information For personal use only This presentation contains general information current as at 7 June 2024 (unless otherwise stated). The events causing losses to exceed forecasts, and uncertainties in the Australian and global economic information on slides 6, 8-10, 12-14, 16-21 is from I
Slide 4: Introduction
Introduction Insurance Australia Group (IAG) is the largest general insurer in For personal use only Australia and New Zealand • Established and trusted brands in Australia and New Zealand provide around A$15 billion in annual premiums • Key attributes include supply chain scale, data-driven pricing
Slide 5: Trusted direct and intermediated brands
Trusted direct and intermediated brands Australia New Zealand For personal use only 1 ~5 million direct customers ~1.25 million direct customers 23% Home market share 46% Home market share 27% Motor market share 48% Motor market share 1 IAG’s short tail personal insurance products are distributed in
Slide 6: Over A$15 billion in Gross Written Premiums
Over A$15 billion in Gross Written Premiums Class of business Division Tail For personal use only 3%1% 5% 13% 5% 23% 31% 46% 24% 31% 87% 31% Motor Direct Insurance Australia Short Tail Home Commercial Short Tail Intermediated Insurance Australia Long Tail Motor Personal Injury/CTP New Zealand Commer
Slide 7: Strategic Focus
Strategic Focus Purpose Strategy People We make your world a safer place Create a stronger, more resilient IAG Our people are the difference: bringing our purpose to life and delivering our strategy For personal use only Focus Approach Ambitions1 Aspirational goals1 Grow with our Deliver outstanding
Slide 8: Unique and diverse capital platform
Unique and diverse capital platform Reinsurance Equity Debt / hybrid • Catastrophe and earnings For personal use only • Capital management options • Hybrid securities volatility covers • Recently completed $550 • Subordinated term notes • Unique quota share million in on-market buybacks arrangements
Slide 9: 1H24 results overview
1H24 results overview For personal use only Gross Written Premium Insurance profit Reported margin $7.9bn $614m 13.7% Up 12.5% Increase of 75% In line with underlying margin Net profit after tax Strong capital position Interim dividend $407m 1.16x CET1 10cps Represents ROE of 12.2% Up to $200m on-ma
Slide 10: Delivering on our strategy
Delivering on our strategy We make your world Create a stronger, Our people are the difference: bringing our Purpose a safer place Strategy more resilient IAG People purpose to life and delivering our strategy For personal use only Strategic Pillars Evidence Retention rates (%): ~90 in DIA Home & Mo
Slide 11: Strong top-line growth
Strong top-line growth Group GWP vs GEP growth For personal use only Reported Gross Written Premium (GWP) growth of 12.5%: 14% • Strong premium increases reflecting claims inflation, higher reinsurance costs and 12% increased perils allowance • Strong retention rates across direct 10% distribution •
Slide 12: Premium increases driven by natural perils and reinsurance costs
Premium increases driven by natural perils and reinsurance costs For personal use only Increasing natural perils and reinsurance (RI) costs ($m) 20% 3,400 Perils above/(below) allowance (RHS) 19% Gross perils allowance (RHS) 2,900 18% Gross RI costs (RHS) Gross RI & perils allowance/GEP (LHS) 17% 2,
Slide 13: Underlying insurance margin improvement
Underlying insurance margin improvement For personal use only Strong NEP growth of 9.3% drives improvement in underlying insurance margin to 13.7% (1H23: 10.7%): • Increased perils allowance to $549m (1H23: $454m) • 260bps claims ratio improvement; • Expense ratio increase to 23.7% (1H23: 22.9%), dr
Slide 14: Strong reinsurance protection for calendar 2024
Strong reinsurance protection for calendar 2024 Gross catastrophe reinsurance program For personal use only $m 10,500 2024 catastrophe reinsurance program • Greater reinsurance protection than originally anticipated Main Catastrophe Program • Maximum event retention for first event of $236m (67.5% o
Slide 15: Ongoing improvement in investment yields
Ongoing improvement in investment yields For personal use only Investment yield on technical reserves 5.0% 5.9% ~$12.4bn Investment Portfolio 3.7% 2.4% $7bn technical reserves invested in fixed interest & cash 56 1.1% • Gain of $290m driven by the higher investment yield 29 31 18 and narrowing of cr
Slide 16: Dividend and capital
Dividend and capital Dividend history Capital ratios For personal use only Dividend payout ratio 60-80% on full year basis Strong capital position above 0.9-1.1x CET1 & 1.6-1.8x PCA 78.9% 77.9% 5.5 10.0 82.8% 79.4% 83.4% 70.2% 72.9% 78.1% 69.9% 2H23 26.0 66.0% 1H24 20.0 20.0 59.0% 16.0 20.0 13.0 2.0
Slide 17: FY24 guidance
FY24 guidance 1 GWP growth of ‘low double digit’ For personal use only Reported insurance margin of 13.5% to 15.5% % $ FY24 Underlying insurance margin drivers • Net Earned Premium growth • Stable claims inflation • Strong investment income • Perils allowance of $1,098m FY24 Reported margin/insuranc
Slide 18: Investor Relations
For personal use only 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 Insurance Australia Group Limited ABN 60 090 739 923 Level 13, Tower Two, 201 Sussex Street Sydney NSW 2000 Australia Ph: +
Slide 19: Appendix 1: FY24 Guidance and Outlook
Appendix 1: FY24 Guidance and Outlook IAG’s financial performance in the first six months of FY24 and confidence in the strength of its underlying business is reflected in FY24 guidance which remains: For personal use only • GWP growth of ‘low double digits’. This will be primarily rate driven to co
Slide 20: Appendix 2: Direct Insurance Australia
Appendix 2: Direct Insurance Australia Key highlights For personal use only • Strong GWP growth driven by Motor 384 351 (14%) and Home (16%) 333 o Short-tail volumes broadly flat, with some growth in RACV in Victoria 247 248 o CTP volume growth in NSW and SA • Earnix pricing engine deployment 167 13
Slide 21: Appendix 3: Intermediated Insurance Australia
Appendix 3: Intermediated Insurance Australia Key highlights For personal use only • Reported profit of $162m and on track to 160 162 deliver on target of at least $250m in FY24 insurance profit 133 135 • Improvement in reported insurance margin to 11.4% (1H23: 3.6%) and 16.2% underlying insurance m
Slide 22: Appendix 4: New Zealand
Appendix 4: New Zealand Key highlights For personal use only • Strong NZ$ GWP growth of 18.8% o Local underlying currency growth of 204 ~16% 146 o A$ GWP growth of 21.1% 136 128 • Strong turnaround in profitability due to 118 18.8% underlying insurance margin 15.3% improvement and benign perils outc
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