The Insurance Australia Group Ltd (ASX: IAG) share price edged lower in November, striking pain again for shareholders.
The company kept relatively quiet over the month with the last price-sensitive release coming at the beginning of November.
The insurance giant’s shares travelled around 8% lower for the month. However, on Friday, the company clawed back some of those losses to post a 1.59% gain. As at market close on Friday, the IAG share price is $4.47.
What’s the latest with IAG?
With the company not making any new announcements since its trading update, investors have continued to weigh down IAG shares.
The company revealed that it is expecting a significant rise in net natural perils claim costs for FY22. Severe storm and hail activity experienced in South Australia and Victoria during October were being blamed for the increased costs.
In total, net natural perils claim costs for the current financial year is forecast to be around $1,045 million. This is a hefty amount from the company’s previous estimates of $765 million. It is worth noting that this includes $510 million for perils events for the remainder of the financial year.
The seasonally unexpected claims made year to date has forced IAG to downgrade its FY22 insurance margin guidance.
As such the company is forecasting an insurance margin guidance range of between 10% to 12%. Previously, the insurance margin level stood in the 13.5% to 15.5% range. Inflationary pressure on claims costs in the company’s motor and home portfolios were partly offset by lower vehicle claims.
Undoubtedly, the concerning update affected IAG shares, falling 7% on the day of the release alone. And since 9 November, its shares have mostly featured in the red, with a number of days recording consecutive losses.
While still trying to navigate its way through the tough trading conditions, IAG shares at trading at near multi-year lows.
IAG share price recap
Over the last 12 months, the IAG share price has lost around 15%, with year to date down 5%. The company’s shares have fallen 60% since July 2019, with heavy losses attributed to the COVID-19 pandemic.
Based on today’s price, IAG presides a market capitalisation of roughly $10.84 billion, with approximately 2.47 billion shares on issue.