IAG share price: where next following key insurance update?

IAG has today provided shareholders with an update concerning its CY20 catastrophic reinsurance program as well as its perils claims costs.

IAG share price: reinsurance program update

The ASX 200 traded firmly higher today: up 88 points or 1.36% a little after noon. All sectors were in the green, following a positive lead from Wall Street overnight.

The insurance giant Insurance Australia Group (ASX: IAG) – detailing its finalised catastrophic reinsurance for CY20 as well as providing the market with a ‘perils update’ – also rose.

Specifically, IAG noted that it had today finalised its catastrophe reinsurance program for CY20 – increasing its gross reinsurance protection from $9bn in CY19 to $10bn in CY20.

Commenting on the nature of the reinsurance program – which represents a vital part of the firm's capital platform – IAG's CFO, Nick Hawkins, said:

'While the structure of the 2020 program is similar to prior years we continue to expand our catastrophe reinsurance cover in a cost-effective manner, while providing additional protection above our modelled exposure.'

IAG further noted that it had increased its multi-year arrangements which the firm has with some of its largest reinsurance counterparties.

Perils claims costs in focus

Reflecting on the deeply tragic bushfire catastrophe currently sweeping through Australia, IAG additionally provided an update on its net natural perils claim costs for the current financial year.

Underscoring the severity of the bushfires, IAG commented that it had already received over 2,800 bushfire-related claims since September 2019, of which a majority (1,500) of these claims, have occurred since December alone.

'Our priority is to help customers affected by these terrible events as soon as possible, while minimising the personal risk to those facing these ongoing catastrophes.'

'Our claims teams are identifying and calling those customers potentially impacted when appropriate, while our dedicated major event claims teams are contacting customers as soon as claims are lodged,’ IAG further said.

Though the company noted that it is too early to provide precise estimates, the company anticipates that claims costs for the first-half of FY20 will hit ~400m (post-quota share).

Maybe most worryingly however, was IAG pointing out that conditions were anticipated to worsen for bushfire impacted regions this coming weekend.

The Morrison Government has been heavily criticised for their response to the continuing bushfire crisis.

IAG is set to report its first-half FY20 results in a little over a month, on February 12.

At current price levels of $7.60 per share, the IAG share price currently trades approximately 8% higher than it did a year ago.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.