Insurance Australia Group (IAG) yesterday announced its first-half results for the financial year ending 30 June 2026 (FY26). Australia's top general insurer also posted a net profit after tax of A$505m ($354m) for the six months to December 2025, down from the A$778m recorded in the prior corresponding period.
The result was affected by a one-off A$174m RACQ Insurance (RACQI) impact from severe seasonal weather immediately following the acquisition, occurring before the business was integrated into IAG's comprehensive reinsurance programme in January 2026.
By comparison, the first half of FY25 (1HFY25) benefited from a A$250m favourable perils experience and a A$200m business interruption provision release.
Underlying insurance profit rose to A$804m in 1HFY26, up from A$747m in 1HFY25, representing an underlying insurance margin of 15.1%, in line with the corresponding period last year. IAG said the improvement was driven by a better underlying claims ratio and expense ratio, partly offset by lower investment yields on technical reserves. Reported insurance profit, meanwhile, came in at A$724m (1H25: A$957m), with a reported insurance margin of 13.5%, impacted by RACQI perils costs and a A$66m release of prior-year reserves. Excluding the RACQI one-off, the underlying insurance margin would have been 16.3%, with a reported margin of 17.7%.
Gross written premium (GWP) grew by 6%, including four months of contribution from RACQI. Retail operations in Australia and New Zealand delivered around 4% underlying growth, with the Australian intermediated business posting 3.5% growth, supported by the WFI Insurance rural portfolio. In New Zealand, the commercial business faced challenging market conditions and currency headwinds but maintained underwriting discipline.
IAG Managing Director and CEO Nick Hawkins said, "The result shows the strength of our business, reflecting the work we’ve done to deliver a more stable earnings profile and maintain a strong underlying margin. It demonstrates our ability to absorb the severe seasonal events and continue delivering value to shareholders."