After a strong start this morning, it ended up being a pretty subdued day for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 ended up finishing this Tuesday with a mild 0.12% gain. But it was a very different story for the Insurance Australia Group Ltd (ASX: IAG) share price.
IAG has had a cracking session. The ASX 200 insurance giant finished the day at $5.67 a share, up a healthy 1.61%. So we can easily say this company was a bonafide market beater, even if, as Bowie might put it, just for one day.
So what was behind IAG shares' smashing Tuesday?
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Why did the IAG share price smash the ASX 200 today?
Well, it's hard to know for sure. But we did get an important piece of news out of the company that may be at least partially responsible.
We've just seen the release of a comprehensive report by the Insurance Council of Australia (ICA), of which IAG is a member, into the devastating floods in Queensland and New South Wales in 2022.
The report examined the operation of eight insurance companies, including IAG, during the crisis. IT found that, on the whole, the Australian insurance industry failed community expectations in a number of areas. These included a finding that the floods "exposed areas of weakness in insurers' claims and complaints handling responses". Further, it noted that "there is more work to be done to improve policyholder outcomes".
In response, IAG released an ASX announcement today that addressed this report's findings.
In this response, IAG CEO Nick Hawkins had this to say:
The Deloitte report is an important opportunity for us and the industry to acknowledge where our response to these devastating floods could have been better and, through the recommendations, take the necessary steps to ensure we're better prepared for future events, so that our customers experience the best possible service and support.
Over the past 12 months we have made a number of changes. These include better customer communications during major events, the speeding up of the building and repair processes and streamlining the claims process for customers. Guided by this report, more will be done.
It's worth noting that the report did not single out IAG, nor any other single insurer, for either direct criticism or praise. But, judging by the response from investors this Tuesday, it seems as though most have been impressed with IAG's response.
Today's share price gains put IAG shares up a rosy 21.67% over 2023 to date, and by 13.86% over the past 12 months.
