After a rough stint in 2021, the Insurance Australia Group Ltd (ASX: IAG) share price outperformed the broader market last quarter – just.
Its gains came amid major flooding events, updates on the second business interruptions test case, and a lawsuit reportedly worth $300 million made against the company.
As of the final close of the March quarter, the IAG share price was $4.38, 2.82% higher than it was at the end of 2021.
For comparison, the S&P/ASX 200 Index(ASX: XJO) gained just 0.74% last quarter.
So, what drove the insurance giant's stock to outperform the market over the 3 months ended 31 March? Let's take a look.
What happened to the IAG share price last quarter?
There was plenty of news from IAG to help boost its share price last quarter.
First, the company updated the market on its catastrophe reinsurance program.
IAG finalised the program for 2022 in early January. Its share price slipped 0.6% on the news.
That dip was recovered in February when the company released its earnings for the 6 months ended 31 December.
Within its results, the company announced its insurance profits had tumbled 57.8% while its revenue slipped 4.4%, leading IAG to drop its dividend from 14.3% to 6 cents.
However, it also provided the market with a guidance upgrade. That potentially helped boost the IAG share price 4.18% higher on its results release.
The stock also moved on news of the second business interruption test case, which previously saw insured businesses arguing that policies should cover some pandemic-related disruptions.
IAG updated the market on the appeal judgement from the Full Court of the Federal Court of Australia in February. The court once again sided with insurers on most policy wording questions.
Though, IAG later said its appealing part of the ruling that found JobKeeper payments shouldn't be considered in an assessment of loss.
The IAG share price also could have been impacted by flooding in parts of Queensland and NSW last quarter.
Initially, the insurer flagged that the extreme weather event could cost it $95 million. However, it later estimated the cost would be around $74 million.
Finally, reports of lawsuits made against the company – worth nearly $300 million – broke last quarter.
The legal action has reportedly been brought against the company following the collapse of Greensill Capital.
IAG previously held a stake in specialist insurer, Bond and Credit Co, which insured credit policies sold to Greensill entities.
IAG argues it holds no exposure to the policies.
