Insurance Australia Group (IAG) has upgraded its fiscal 2026 financial guidance following the completion of its acquisition of the Royal Automobile Club of Queensland’s insurance business, the company announced at its annual general meeting on Thursday.
The Sydney-based insurer now expects gross written premium growth of about 10% for FY26, up from its previous forecast of low-to-mid single-digit growth. The upgrade reflects the inclusion of RACQ Insurance, which joined IAG’s portfolio on Sept. 1, according to a statement released to the Australian Securities Exchange.
IAG has also lifted its reported insurance profit guidance to between $1.55 billion and $1.75 billion, marking a $100 million increase from the prior range of $1.45 billion to $1.65 billion. This equates to a reported insurance margin of between 14% and 16%.
The upgraded guidance assumes a natural peril allowance of $1.47 billion for FY26, adjusted to incorporate RACQI. The forecast also assumes no material prior-period reserve releases or strengthening, and no significant changes in macroeconomic conditions, including foreign exchange rates or investment markets.
Managing director and CEO Nick Hawkins told the annual meeting that the RACQI business was performing above initial expectations. “We’re pleased to confirm that the RACQI business is performing slightly ahead of our expectations,” Hawkins said.
Hawkins added that the acquisition, which was funded internally, aligns with IAG’s long-term growth objectives. “The internally funded acquisition is strategically aligned with our growth ambitions, and the integration process is progressing smoothly. It strengthens our position in the Queensland market and supports our ‘through the cycle’ targets of a 15% reported insurance margin and 15% return on equity,” he said.
The upgraded guidance follows a strong full-year 2025 result, in which IAG reported a net profit after tax of $1.359 billion, up from $898 million in the prior year. The group’s gross written premiums rose to $17.1 billion from $16.4 billion, supported by higher net earned premiums and lower-than-expected natural peril costs.
The company’s board authorised the guidance upgrade announcement.
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