Those invested in Insurance Australia Group Ltd (ASX: IAG) shares likely jumped for joy earlier this week when the company revealed a $350 million on-market share buyback.
And there's potentially more good news on the horizon, with the company hinting more cash could be returned in the future.
Right now, the IAG share price is $4.89, the same as its previous closing price. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has gained 1.59%.
Let's take a closer look at the mountain of gold that could be distributed to shareholders.
Image source: Getty Images
Could this ASX 200 share offer more windfalls?
The IAG share price leapt 1.5% on Monday after the company announced a $350 million buyback. The buyback will be funded by a reduction in its business interruption provision.
The company lowered the provision after the High Court denied appeals against COVID-19-related claims.
But the company has a healthy stash under its sleeves in case of further litigation, to the tune of $615 million.
Now, there's no reason to think the company might not need that cash. However, some experts reportedly believe most of it will ultimately end up in the hands of investors.
Morgan Stanley analyst Andrei Stadnik is said to believe IAG could hand the funds to shareholders in three parcels. The second is tipped to be released in the middle of 2023, the Australian Financial Review reports.
Meanwhile, the ASX 200 insurance share, responsible for brands including NRMA Insurance, CGU, and WFI, is being inundated with claims as parts of Victoria, NSW, and Tasmania experience severe flooding.
IAG today revealed it's received 1,470 claims due to heavy rains and floods since last Wednesday. That figure is expected to grow further over the coming weeks as impacted Aussies return to their homes.
