Insurance Australia Group raised its fiscal 2026 outlook on the back of its completed acquisition of the Royal Automobile Club of Queensland’s insurance arm.
The Sydney-based insurer now expects gross written premiums to climb about 10%, a step up from its earlier forecast of low- to mid-single digit growth.
Reported insurance profit is projected between A$1.55 bn and A$1.75 bn, an increase of roughly A$100 mn over the prior range.
That translates to a margin of 14% to 16%, assuming a natural peril allowance of A$1.47 bn adjusted to include RACQI, and stable macroeconomic conditions with no unusual reserve shifts.
- FY26 natural peril allowance of $1,470mn which has been adjusted to include RACQI;
- no material prior period reserve releases or strengthening; and
- no material movement in macro-economic conditions including foreign exchange rates or investment markets.
“We are pleased to confirm that the RACQI business is performing slightly ahead of our expectations,” said managing director and CEO Nick Hawkins at IAG’s annual meeting. He added that the integration is progressing smoothly, describing the internally funded deal as aligned with IAG’s growth ambitions.
Hawkins said the acquisition strengthens IAG’s presence in Queensland and underpins its long-term targets of a 15% reported insurance margin and 15% return on equity through the cycle.
IAG closed the A$855 mn transaction on Sept. 1, 2025, alongside the launch of a long-term strategic alliance with RACQ in Queensland’s general insurance market.
