Is the IAG (ASX:IAG) share price bouncing back in September?

The IAG share price is steadily gaining this month. We take a closer look at why.

| More on:
A young woman wearing glasses and a red top looks at her laptop smiling

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 been pushing higher this month.

This is despite CMC Hospitality filing an application starting a representative proceeding against IAG in the Federal Court.

It appears investors are willing to put the company's FY21 woes aside and are focusing on the FY22 financial outlook.

At Friday's market close, the IAG share price finished the day up 1.33% to $5.33. This added to its gain of 2.5% in September so far.

During the week, IAG peaked at $5.49 — not far off its 52-week high of $5.51 reached on 13 August.

What's driving IAG higher lately?

A likely catalyst is that investors are bullish on the company's anticipated performance for FY22.

In its full-year results, IAG highlighted that it achieved a mostly solid scorecard, with growth across key metrics.

The biggest downside of the report was the company's bottom line, registering a net loss after tax of $427 million.

However, it was the result of significant one-off corporate expenses, mainly relating to business interruption, customer refunds, and payroll remediation.

Looking ahead, IAG reintroduced its guidance, given its sound underlying financial numbers in FY21.

Gross written premium (GWP) is expected to produce "low single-digit growth" and an insurance margin of between 13.5% and 15.5% for FY22.

The company said the guidance aligns with its aspirational goal to achieve a 15% to 17% insurance margin over the medium term. IAG believes an insurance profit of at least $250 million is achievable over the next 3 to 5 years.

IAG managing director and CEO, Nick Hawkins commented:

The strength of our core business and its sound underlying performance in FY21, our new operating model with clear, embedded executive responsibilities, as well as greater certainty in the economic outlook, mean that we are confident that IAG's underlying performance will continue to improve.

IAG share price summary

Over the past 12 months, IAG shares have moved about 10% higher, with year-to-date gains of close to 15%.

The IAG share price has underperformed the S&P/ASX 200 Index (ASX: XJO), which is 26% higher over the 12 months and almost 11% higher year to date.

Based on today's price, IAG has a market capitalisation of roughly $13.11 billion, with 2.46 billion shares on its registry.

Motley Fool contributor Aaron Teboneras 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

Australian insurance sector: Does Macquarie prefer IAG or Suncorp shares?

Here’s an expert’s views on the insurance sector.

Read more »

A woman sits on a chair smiling as she shops online.
Financial Shares

Which ASX 200 financial share delivered better returns in FY25: IAG, AMP, or Zip?

We compare share price movements and dividend payments for these 3 ASX 200 financial stocks.

Read more »

a man sits in unhappy contemplation staring at his computer on his desk in a home environment, propping his chin on his hand.
Financial Shares

Did Suncorp or QBE insurance shares perform better in the last year?

These insurance providers brought solid returns for investors in the last 12 months. 

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Financial Shares

Up 58% since April, this ASX 200 financial stock just reported record results

The ASX 200 wealth management and technology company has been on a tear since April. Here’s the latest.

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Financial Shares

Does Macquarie rate IAG Insurance shares a buy, hold or sell?

The insurer's share price has slumped this week.

Read more »

Worried woman calculating domestic bills.
Financial Shares

What's the outlook for household deposit growth for the big 4 banks?

Household deposit growth has accelerated over the past two years.

Read more »

A man looking at his laptop and thinking.
Broker Notes

After crashing more than 21% yesterday, does Macquarie rate Helia shares a buy?

Should I buy the big dip on Helia shares? Here’s Macquarie’s latest share price forecast.

Read more »