The Insurance Australia Group Ltd (ASX: IAG) share price is in focus today after the insurance giant posted a 23% jump in revenue to $11.14 billion, while net profit after tax (NPAT) fell 35.1% to $505 million for the half year ended 31 December 2025.
Image source: Getty Images
What did Insurance Australia Group report?
- Revenue: $11.14 billion, up 23.3% from 1H25
- Net profit after tax (NPAT): $505 million, down 35.1%
- Gross written premium (GWP): $8.93 billion, up 6.0%
- Reported insurance margin: 13.5%, down from 19.4%
- Interim dividend: 12 cents per share, franked to 25%
- Return on equity (ROE): 13.8%, down from 22.7%
What else do investors need to know?
The result was impacted by severe weather events, particularly in the newly acquired RACQ Insurance Limited (RACQI) portfolio, contributing to higher than expected claim costs. Excluding RACQI, insurance profit was stronger, and the reported margin was 17.7%.
IAG completed its $855 million acquisition of 90% of RACQI in September 2025. The half-year results include four months of contribution from this business. IAG also announced an on-market share buy-back of up to $200 million, reflecting its strong capital position.
The board determined to pay an interim dividend of 12 cents per share, payable on 13 March 2026, with a 25% franking rate. The dividend reinvestment plan will apply.
What's next for Insurance Australia Group?
IAG is maintaining its FY26 profit guidance, expecting high single-digit GWP growth and an insurance profit between $1,550 million and $1,750 million. The integration of the RACQI business is expected to strengthen IAG's Queensland footprint, with further improvements in the reported insurance margin anticipated as RACQI is fully integrated into IAG's reinsurance program.
The company has announced a buy-back of up to $200 million in shares, and continues to invest in technology and claims transformation to help offset inflationary pressures and improve efficiency.
Insurance Australia Group share price snapshot
Over the pat 12 months, IAG shares have declined 18%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.
