AUSTRALIA INSURANCE FY27 Margins supported; Some risk to GWP outlook; Buy IAG

研报英文原文证据摘录

AUSTRALIA INSURANCE FY27 Margins supported; Some risk to GWP outlook; Buy IAG

Equity Research

5 July 2026 | 6:21PM AEST

AUSTRALIA INSURANCE

FY27 Margins supported; Some risk to GWP outlook; Buy IAG

Key points we flag into results Julian Braganza, FIAA

+61(2)9321-8487 |

julian.braganza@gs.com

n Moderate GWP/NEP growth into FY27; with some risk: Broadly, the premium Goldman Sachs Australia Pty Ltd

rate cycle is resulting in more muted GWP growth with some risk around FY27

growth guidance; we are at ~3-4% with IAG higher reflecting annualisation of

RACQ partially offset by relatively more pressure on volumes v SUN we think.

SUN flagged 2.7% GWP growth for FY26. NEP growth is likely to be impacted by

IAG’s QS increase to 35% + SUN’s aggregate purchase; notwithstanding

reinsurance rate benefits.

n However, margins look OK for FY27: While headline rate is likely eroding margin

buffers /strength across a number of classes, both IAG/SUN have levers including

expense ratio savings, reinsurance rate benefits/profit commissions and yields

that are supportive of margins. IAG should also benefit from improving RACQ

margins + profit commissions. Both SUN/IAG flag that a large % of their premium

is priced on an input cost basis and should respond to inflation/margin pressures

providing defensive characteristics (albeit with a lag).

n ROEs remain strong with capital generation in excess of capital strain from

growth: This should offer capital management/M&A potential. ROEs for both

IAG and SUN are also protected from perils downside. This should support

valuations with 1 year forward P/Es currently at ~mid-cycle levels.

n IAG v SUN: As we have recently published here, we have a relative preference for

IAG noting relative margin upside v consensus, Reinsurance/ M&A catalysts