The Insurance Australia Group Ltd (ASX: IAG) share price has shone over the last month, outpacing the broad index.
Whereas the S&P/ASX 200 index (ASX: XJO) has posted a return of around 0.5% from August until date, IAG shares have climbed a further 10% in the green.
Image source: Getty Images
What tailwinds are behind the IAG share price lately?
The IAG share price has been on the move since the company reported its FY21 earnings in August.
In the report, the company recognised a 170% year on year gain in cash earnings to $747 million. As a result, the company grew its dividend by 100% to 20 cents a share.
Another key takeout was an approximate 4% growth in gross written premium (GWP), which helped insurance profit climb 36% to over $1 billion.
Investors often value a company's shares based on historical earnings results and future earnings expectations.
That's why it is important to consider a company's guidance, and how this fits in with the bigger growth narrative.
Zooming in on IAG's guidance, management expects "low single-digit GWP growth" and an insurance margin of 13.5%–15.5% in FY22. As a result, IAG forecasts an insurance profit of "at least $250 million" over the coming years.
This is no doubt heavily considered by many sophisticated and retail investors, who could be buying IAG shares on the company's future earnings expectations.
One other factor that has weighed in on the IAG share price was the board restructuring back in early August.
The company announced that three new directors will join its board, David Armstrong, George Sartorel and Scott Pickering. All members come with extensive experience in financial services and are said to bring immense value to the IAG board.
The IAG share price jumped from $4.87 to $5.45 over the time in which these two events took place.
IAG share price snapshot
The IAG share price has climbed 14.5% this year to date, extending the gain over the previous 12 months to 9.5%.
Both of these results have outpaced the broad index's return of around 25% over the past year.
