Insurance Australia Group Ltd (ASX: IAG) shares fell 7.3% after the insurer released its full-year FY26 results on Thursday.
The IAG share price opened at $7.96, down from its closing value of $8.23 yesterday.
As investors digested news of a 25% drop in full-year net profit compared to FY25, IAG shares drifted down to an intraday low of $7.63.
IAG shares are currently the third-worst performer of the ASX 200 today.
Here are the highlights of the FY26 report.
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IAG share price tumbles on lower net profit last year
Here are the key numbers reported by IAG today:
- Net profit after tax (NPAT) of $1,022 million, down 24.8% on FY25, however IAG noted that a $330 million pre-tax BI provision
release and a $195 million favourable peril experience benefitted the FY25 numbers - Underlying insurance profit of $1,578 million, up from $1,542 million in FY25
- Gross Written Premium (GWP) of $18,412 million, up from $17,106 million in FY25
- IAG paid $12.4 billion in claims, up from $10.2 billion in FY25
- Final dividend of 20 cents per share with 80% franking, up from 19 cents with 40% franking in FY25
- Full-year dividend of 32 cents per share, up from 31 cents in FY25
What else happened in FY26?
IAG said the FY26 results reflected momentum and progress towards its refreshed Ambition 2030 strategy.
IAG said the pre-tax insurance profit of $1,552 million, compared to $1,743 million in FY25, mainly reflected increased natural perils.
The underlying insurance profit equated to an underlying insurance margin of 15%, which is 50 basis points lower than FY25.
IAG said this reflected an improved underlying claims ratio and expense ratio, which was more than offset by a higher perils allowance, first year transitional impacts of the acquired RACQ Insurance (RACQI) business, and lower investment yield on technical reserves.
The company said if it excluded the one-off impact of RACQI, the underlying insurance margin would have been 16%.
GWP growth was largely due to the Australian retail business growing 17.8% to a total GWP of $10,308 million.
That included $1,272 million in GWP from RACQI.
IAG said GWP growth was stronger in the second half, mainly due to new business in the direct motor and home divisions.
What did IAG management say?
IAG CEO and managing director Nick Hawkins said:
Throughout FY26, we actively managed our response to 65 severe weather events across Australia and 44 in New Zealand, demonstrating our strength, scale and technologically advanced operations.
We have a strong financial position and have good growth momentum in our Australian and New Zealand retail segments.
Profitable growth continues to be a strategic priority. Operating in growing markets, we will continue to focus on organic opportunities to increase our market share. Our alliances with RACQ in Queensland and RAC in WA2 are expected to deliver further scale.
Hawkins added that said artificial intelligence (AI) was creating productivity gains.
Central to our transformation is AI for organisational efficiency, competitive positioning and customer service.
More than 60% of our people use AI regularly, and we have more than 90 AI solutions in use throughout the business.
Last month we announced a new partnership with OpenAI that will help our people deliver more effective customer service, particularly in claims handling during severe weather events.
What's next for IAG?
IAG provided FY27 guidance of 5% to 8% GWP growth and a targeted reported insurance margin of between 14.5% and 16.5%.
Hawkins said Ambition 2030 set out a clear plan for IAG's next growth phase.
The company hopes to grow its customer base to 11 million and GWP to more than $25 billion.
Hawkins commented:
Ambition 2030 clearly outlines our targets of 15% or higher ROE, high single-digit EPS growth, and topquartile total shareholder returns, providing sustainable, growing dividends.
IAG share price snapshot
The IAG share price has fallen 3.6% in the calendar year-to-date and 9.3% over 12 months.
The ASX 200 financial stock hit a 52-week high of $9.17 in August 2025.
IAG shares traded at a 52-week low of $6.39 in March this year.
