Insurance Australia Group "Strong ambitions" (Buy) Chidgey

研报英文原文证据摘录

Insurance Australia Group "Strong ambitions" (Buy) Chidgey

set to lean into agentic AI commerce to support growth and 06/26E 0.42 0.42 -0 0.43

evolving customer distribution preferences, backing its scale, data and brand as 06/27E 0.49 0.49 1 0.48

differentiators in an AI world. While we expect the market to remain more sceptical of 06/28E 0.51 0.52 1 0.50

improving market share prospects in the near term, if achieved we note IAG's FY30E

GWP target is ~5-6% ahead of UBSe/Cons on an underlying basis (adjusting for RAC). Kieren Chidgey

Analyst

kieren.chidgey@ubs.com

ITR margin risks more clearly skewed to the upside +61-2-9324 2820

An upgraded 15%+ ITR margin target (was ~15%) more clearly reflects the potential

Shreyas Patel, FIAA

upside skew from: (i) 14-16% U/L ITR incl. RI aggregate profit commission of ~75bps, (ii)

+100-200bps from RI quota share profit commission (top-end if CAT budget achieved), shreyas-k.patel@ubs.com

and (iii) +100bps from CAT budget ~$100m above median modelled outcomes. +61-2-9324 2821

Collectively, this implies a significant positive upside skew to ITR margin outcomes with

Fraser Noye

only moderate downside to 14% and upside towards 18%, with 16-17% a realistic

average depending on potential reinvestment for growth. We lift our FY27-28E ITR to fraser.noye@ubs.com

16.3% (from 16.0%) and see upside to Consensus at 15.8% with our IAG ITR 4.7% +61-2-9324 3353

ahead of our 11.6% SUN outlook, consistent with IAG's ~5% RI QS margin benefit.

Buy rating retained with price target lifted to $8.80/share

We trim our FY26E EPS -0.3%, reflecting a softer NZ & Commercial backdrop with

2H26E GWP of 9.5% (1% excl RACQ), though we lift FY27-28E EPS 0.5% reflecting

stronger ITR prospects. Our PT lifts to $8.80 (from $8.70), reflecting the average of our