Insurance Australia Group (ASX: IAG)

Insurance Australia Group (ASX: IAG) A general insurance company







Product / Service

  • IAG operates four business units:

    • Personal Insurance – provides general insurance to customers throughout Australia, including brands such as NRMA Insurance, SGIO, SGIC, CGU, RACV and the Coles Insurance brand.  General insurance includes any insurance that is not life insurance.  This includes automobile insurance, home insurance, pet insurance, travel insurance, business insurance, workers compensation and indemnity insurances

    • Commercial Insurance – provides commercial insurance to businesses throughout Australia through the CGU, WFI and Swann Insurance brands.  Most commercial insurance is distributed through intermediaries such as brokers

    • New Zealand – provides personal and commercial insurance through NZ subsidiaries

    • Asia – provides personal and commercial insurance through subsidiaries in Vietnam, Thailand and Indonesia and investments in associated companies in Malaysia, India and China

  • Insurance companies such as IAG generate profits through two main avenues:

    • Premiums – customers pay insurance premiums to transfer the financial risk of an event to the insurance company.  If that event happens, the insurance company is financially liable.  The total income received is then netted off against claims paid to customers

    • Investment Revenue – insurance companies are paid premiums up-front, but may not have to pay claims until a later time.  This cash flow forms a pool of money that can be invested.  Insurance companies typically invest these pools conservatively and there are strict rules about keeping the funds available should claims need to be paid suddenly

  • The FY2015 result for IAG’s Commercial Insurance division is an interesting example of how insurance companies work.  After claims paid, the division made a loss of $110m.  However, the investment income was $203m, resulting in a net profit of $93m for the division


  • IAG was formerly known as NRMA Insurance Group Limited

  • The National Roads and Motorists’ Association (NRMA) started providing insurance to its members in ACT and NSW in 1925

  • In the 1990’s, NRMA began expanding into other markets through organic growth, acquisitions and partnerships

  • NRMA was demutualised in 2000 with the resulting NRMA Insurance Group Limited listed on the ASX.  This name was changed to IAG in 2002

  • Today, Insurance Australia Group (IAG) is the entity that holds many well-known insurance companies including NRMA Insurance, SGIO, CGU and Coles Insurance


  • IAG’s customers include individuals and businesses


  • The company is headquartered in Sydney

  • The company’s operations are in Australia, New Zealand and Asia

To create Asia Pacific’s most loved, most inventive and most successful insurer

Profitability Table

Year Revenue ($m) % change EBIT ($m) % change
FY 2009 7,842 0.6 312 P
FY 2010 7,782 (0.8) 402 28.8
FY 2011 8,050 3.4 614 52.7
FY 2012 8,495 5.5 763 24.3
FY 2013 9,498 11.8 1,593 109
FY 2014 9,779 3.0 1,802 13.1
FY 2015 11,440 17.0 949 (47.3)
FY 2016 11,411 (0.3) 920 (3.1)

Fun Facts

  • Peter Harmer’s (CEO) total remuneration for FY 2016 was $4.1m.  He took over from Michael Wilkins in FY 2016

  • In June 2015, Warren Buffet’s Berkshire Hathaway acquired a 3.7% stake in IAG


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