INSURANCE AUSTRALIA GROUP LIMITED (IAG)



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General Information
Company Name: Insurance Australia Group Limited
Stock Code: IAG
Website: www.iag.com.au
GICS Sub-Industry: Property & Casualty Insurance
Market Cap ($M): 13,113
Equiv. Shares (M): 2,342

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 5.670 $ 5.630 $ 5.670 $ 5.610 $ 5.600 6,039,536 $ 0.070  1.250 %

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 27th Mar 2014
12 Month Target Price (average): $5.721
Brokers Surveyed: 7

Company Overview

Business Description:
Insurance Australia Group Ltd (IAG) is a general insurance group, with operations in Australia, New Zealand, and Asia. Its current business is to sell insurance under several brands including NRMA Insurance, CGU, SGIO, SGIC and Swann Insurance (Australia); NZI, State and AMI Insurance (NZ); and Safety and NZI (Thailand). IAG also has interest in general insurance joint ventures in Malaysia, India and China.

Strategy Analysis:
Insurance Australia Group reported NPAT of $461.0m for the half-year ended 31 December 2012. Revenues from ordinary activities were $5.38bn, down 4.3% from the same period last year. Diluted EPS was 21.54 cents compared to 6.91 cents last year. Net operating cash flow was $942.0m compared to $649.0m last year. The interim dividend declared was 11.0 cents compared with 5.0 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 1,085.4 50.2 -8.3 11.2 34.0 6.1 100.0
2014  F 1,186.5 54.8 1.7 10.2 36.0 6.4 100.0
2013  A 1,156.0 53.8 92.0 9.0 36.0 7.4 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Insurance Aust. Grp. (IAG) $13,113 M 1.8044 0.0801 -0.1092 11.2179 10.3858 11.6594 0.0643 0.0628 0.0628
QBE (QBE) $14,884 M -- -- 0.3315 -- 12.8186 9.6269 0.0301 0.0376 0.0516
Suncorp Group (SUN) $16,507 M -0.3107 1.3886 0.1489 33.3941 13.9806 12.1692 0.0585 0.0592 0.0651

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth
IAG 0.76 10.53 2.43 10.00
Market 1.07 15.9 1.26 1.99
Sector 0.81 18.6 1.51 0.65

Directors
Name Position Start Date
Mr Michael J Wilkins Chief Executive Officer,Managing Director 26 November 2007
Mr Brian Martin Schwartz Non-Executive Chairman 01 January 2005
Dr Nora Lia Scheinkestel Non-Executive Director 01 April 2013
Ms Catriona Alison Deans Non-Executive Director 01 February 2013
Mr Hugh Alasdair Fletcher Non-Executive Director 01 September 2007
Mr Peter Hallam Bush Non-Executive Director 07 December 2010
Yasmin Allen Non-Executive Director 10 November 2004
Mr Philip J Twyman Non-Executive Director 09 July 2008
Mr Siang (Raymond) Keat Lim Non-Executive Director 01 February 2013

Management
Name Position
Justin Breheny Chief Executive Officer, Asia
Andy Cornish Chief Executive Officer, Australia Direct
Peter Harmer Chief Executive Officer, CGU
Jacki Johnson Chief Executive Officer, New Zealand
Nicholas Hawkins Chief Financial Officer
Leona Murphy Chief Strategy Officer
Chris Bertuch Company Secretary

Substantial Shareholders
Holding Name
-- (5.01%) Perpetual Limited and subsidiaries

Calendar of Events
Date Event
20 February 2015 Report (Interim)
21 August 2014 Report (Prelim)
21 August 2014 Report (Annual)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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