The Insurance Australia Group Ltd (ASX: IAG) share price is in reverse today following a string of developments from a major competitor.
At the time of writing, the insurance giant's shares are down 1.75% to $5.32. In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.94% to 7,511 points.
What's going on with the IAG share price?
Investors are selling IAG shares today after news out of a rival insurance group.
Yesterday, Steadfast Group Ltd (ASX: SDF) reported solid results for the FY21 period, highlighting an increase across the board. This was driven by the company's pursuit of both organic and acquisition strategies.
In addition, Steadfast today announced it had successfully completed a capital raise of $200 million to further expand its presence. Coverforce, Australia's largest unlisted insurance broker, will become a part of Steadfast, cementing its strong market position.
With IAG's competitor growing at a rapid pace, it's possible market share could be taken away.
Just last week, IAG released its full-year results for FY21 to the ASX. The company reported underlying insurance margins down 130 basis points to 14.7%. This led to insurance business recording a net loss after tax of $427 million. The IAG share price ended the day down 2.7%.
However, management appears optimistic for the future heading into FY22. IAG managing director and CEO Nick Hawkins commented:
…The strength of our core business and its sound underlying performance in FY21, our new operating model with clear, embedded executive responsibilities, as well as greater certainty in the economic outlook, mean that we are confident that IAG's underlying performance will continue to improve.
How have IAG shares tracked lately?
Over the past 12 months, IAG shares have moved in circles, up 5% higher, with year-to-date gain sitting at 12%.
The company's share price is currently above the middle of its 52-week range of $4.30 to $5.51.
Based on valuation grounds, IAG commands a market capitalisation of around $12.8 billion, with more than 2.4 billion shares outstanding
