Here's why the IAG (ASX:IAG) share price is up 6% in the last 3 months

Since this news became public, the IAG share price has rallied.

| More on:
An executive stands looking out a glass window over the city.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Insurance Australia Group Ltd (ASX: IAG) share price has not had a great start to the trading week this Monday. At market close, IAG shares finished down 0.74% to $5.34 a share.

Zooming out a little, and the picture improves somewhat for IAG shareholders. Over 2021 so far, IAG shares are up 13.14%. That includes a 6.6% gain over just the past 3 months. In contrast, the S&P/ASX 200 Index (ASX: XJO) is 'only' up around 12.27% year to date so far. As well as up 'just' 4.8% over the past 3 months. So IAG has been a market-beating investment across both the past 3 months and in 2021 so far.

The more attuned ASX investors out there might point to IAG's recent earnings report as a potential catalyst. IAG's 2021 financial year (FY21) earnings were delivered earlier this month .

On 11 August, IAG reported that its cash earnings were up a substantial 170% to $747 million, with a 100% boost to its final dividend to 20 cents a share. However, those pleasing metrics had to be digested with IAG's $427 million net loss after tax.

Even though the company was bullish on its FY2022 prospects in this earnings report, with management stating "IAG's underlying performance will continue to improve," initially investors weren't entirely on board. As we reported at the time, the IAG share price dropped after the release of these earnings.

Saying that, IAG shares have risen around 1.33% between the day before these earnings were released and today. But they are certainly not enough to explain the company's performance over the past 3 months.

New executive gives IAG share price a boost

Another development seems to have supported IAG over this period though. Back on 20 July IAG announced that Tim Plant had been appointed as chief insurance and strategy officer, a newly created role. Plant is a former CEO of Zurich Insurance Group.

Here's what IAG managing director and CEO Nick Hawkins said of the appointment at the time:

Tim brings a considerable depth of underwriting and insurance experience, as well as a deep understanding of customer needs through his leadership roles in the Australian and New Zealand general insurance markets. Tim's experience will further bolster IAG's leadership and I look forward to welcoming Tim to the team.

Since this news became public, the IAG share price has rallied more than 10.5%. So it seems this move has been at least somewhat accretive to the IAG share price.

At the current IAG share price, the company has a market capitalisation of $13.26 billion and a dividend yield of 2.62%.

Should you invest $1,000 in Insurance Australia Group Limited right now?

Before you buy Insurance Australia Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Insurance Australia Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

Woman and man calculating a dividend yield.
Financial Shares

Here's what Macquarie thinks QBE shares are worth after reviewing 18 global insurers

Macquarie has just issued a new note on QBE shares.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Financial Shares

Should I buy the dip on Macquarie shares now?

Atop their reliable passive income, Macquarie shares offer growth potential, according to this leading expert.

Read more »

Nervous customer in discussions at a bank.
Financial Shares

Guess which ASX 200 bank stock just crashed 19% on shock news

Investors have been hitting the sell button in a panic this afternoon.

Read more »

Two CEOs shaking hands on a deal.
Financial Shares

This ASX 300 stock is jumping on surprise merger news

This stock could be having a very big makeover.

Read more »

Man smiling at a laptop because of a rising share price.
Financial Shares

How this quality ASX 200 stock is 'ideally placed' for years of growth

A leading expert expects more outperformance from this high-flying ASX 200 stock.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Financial Shares

Looking for financial stocks outside the big 4 banks?

With the financial sector down to start the year, could these stocks provide upside?

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Financial Shares

This leading broker just upgraded AMP shares to 'outperform'. Here's why

This top broker just turned bullish on AMP shares. But why?

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Up 53% in a year, why is this ASX 200 financial stock leaping higher again today?

Investors are sending the ASX 200 financial stock soaring on Wednesday. Let’s see why.

Read more »