IAG - Insurance Australia Group

[theasxgorilla]

Personally, I'd be looking at the support levels. Figure out how many major/minor support levels it's got to break through before it reaches $5.50. $6.00 is the biggie that I can see right now. Then $5.75ish. Nice round numbers. Who says T/A isn't useful?

Then, even if the price drops through both of those on it's way to $5.50 and you decide to sell, your net break-even cost-base is still better than someone who had to pay brokerage.

I agree with Barney, it will most likely retrace, and possibly go sideways again for a while, but the writing is on the wall/chart...it's broken out on volume and the trend is UP.

BTW, even if you decide to get in at $5.50, remember to set a stoploss. Maybe you set yours at $5.50 (or slightly below to avoid being too obvious). From the recent high of $6.44 this would represent a peak-to-trough draw down of 15%. Historically, when uptrending, IAG has never exibited a peak to trough draw-down of more than 14%. Statistically this puts you outside the noise. If price goes on to exceed the high of $6.44 move your stop up. You now have a trade that will be break-even at worst.

 

[Rainmaker]

Just wondering did people get the interim dividend of 13.5 cps last Friday? Mine hasn't come through yet....

 

[milionerka]

I understand that the payment date is 16 April 2007, at the level of 13.5 cents per share (as compared to 16cents last year)...

 

[RFG001]

IAG Dump or Hold

What is going on with this company, poor share performance, bad losses and no real direction. My question would be HOLD or Dump this share ?

Would appreciate constructive response.

Cheers
RFG

 

[Ferret]

Well I bought some at 5.11 the other day, mainly with the intention of taking the 16c dividend and then selling out when (if?) the share price regains the dividend.

I thought at the time their decision to significanlty lighten their investments in equities at the end of 2006 was a bit strange. That hasn't panned out at all. Nevertheless, whilst competitive, I don't think insurance is a bad business. I think the they will bounce off the $5 mark unless world markets tumble again.

Ferret

 

[AnalysisParalysis]

Re: IAG Dump or Hold

What is going on with this company, poor share performance, bad losses and no real direction. My question would be HOLD or Dump this share ?

Would appreciate constructive response.

Cheers
RFG

They're a big company, at high risk. Natural disaster happens, down goes stock price. How can anyone factor in the weather to fundamental analysis?

 

[Ferret]

No doubt they have actuaries who model the risk. But climate change adds a bit of uncertainty to this.

There is a view that the occaisional disaster is good for insurance companies. Reminds people that there is a need to buy their product.

Still, I'm down more than I'd hoped at the moment!

Ferret

 

[RFG001]

IAG a take over TARGET in my opinion, QBE the likely Giant that could take over, IAG is Australia's biggest insurance company and QBE would do a better job running it , our premiums would go up and so would QBE share price. :chainsaw:

 

[BlingBling]

I think anyone one would do a better job running it than the bunch of incompetents at the moment.
I can't believe that they were negotiating that china deal that fell thru for 3-4 years

 

[Ferret]

A lot of volume today and a decent rise.

I don't know about the takeover idea. A takeover might be hard to get passed the competition regulators.

Bargain hunting by LICs and some funds is my guess.

 

[bromham]

Don't know about takeover speculation but my Elliot wave charts insist on a price of $5.80 - $6.00 by the end of the year. Recent performance hasn't been too flash though. Maybe it knows something I don't.

 

[Pager]

Dipped below $5 this afternoon, FF yeild of about 6%.

Whats the problem with it ?, maybe over reaction to more storms and more claims ?.

Been a dog for a while but keeps putting out positive news .

Is it still a potential takeover traget, QBE has been linked before but nothing came of it ?.

I hold for the long term but is one of my worst performers , at least i have the yeild though .

cheers

Pager

 

[Hoobie]

It should be scheduled for a price surge before the Christmas season as the execs bust their asses to pump out some positive news to earn their bonuses. I certainly hope so, it's dragging my portfolio down at the moment.

 

[Rimtalay]

Vote NO pay rise for the directors. I have.
If the share price goes down, so should their pay.
Directors want more money at shareholders expense.
Too many pigs at the trough.

 

[RFG001]

Vote NO pay rise for the directors. I have.
If the share price goes down, so should their pay.
Directors want more money at shareholders expense.
Too many pigs at the trough.

Rimtalay

STOP making all this noise, you are going to wake up the IAG directors, dont you know they have being working hard, and deserve their rest and of course more money !!! shhhh!:swear:

 

[Hoobie]

IAG is at a 52 week low on no (bad) news besides a general downturn on the ASX and DOW. It's looking like a bargain, no?

 

[bigdog]

Australian news item in The Australian October 26, 2007

52-wk High 6.6300
52-wk Low 4.4600

SP is currently
IAG 4.45 -0.050 -1.11% 2,971,539 shares $13,328,189 @ 12-Nov 02:48:10 PM

http://www.theaustralian.news.com.au/story/0,25197,22651947-643,00.html

Downgrade makes IAG a takeover target
October 26, 2007

INSURANCE Australia Group today downgraded revenue forecasts, softening it up as a takeover target and putting a bigger cloud over the future of chief executive Michael Hawker.

INSURANCE Australia Group today downgraded revenue forecasts, softening it up as a takeover target and putting a bigger cloud over the future of chief executive Michael Hawker.

Speculation the former test rugby player could be falling out of favour with institutional investors was further fanned by IAG's announcement today that it had hired former Promina chief Mike Wilkins to the new role of chief operating officer.

IAG also revealed its plans to ride out intense competition in British motor and Australian commercial markets by hiking prices, had not been as successful as first hoped.

It forecast gross written premium growth this financial year of between 7 and 9 per cent, down from its previous guidance of growth between 10 and 12 per cent.

The biggest insurer of Australian homes and cars has expanded aggressively into the cut-throat UK market, spending almost $2 billion on acquisitions in the past 12 months.

After delivering a 27 per cent dip in 2006/07 profit to $552 million on higher storm claims, Mr Hawker said in August that he was hoping price increases would keep premium growth in check.

He said today the downgrade was disappointing.

“Changing our outlook for fiscal 2008 is disappointing but it needs to be considered in the context of our disciplined approach to not continuing to write underperforming business,” Mr Hawker said in a statement.

Bell Potter senior adviser Stuart Smith said IAG was a takeover target.

“I think QBE will have a bid for it,” Mr Smith said.

Southern Cross Equities director Angus Aitken agreed that IAG was a cheap buy.

Shares in IAG had fallen 1.8 per cent to $4.81 by late afternoon, having earlier fallen as much as 6.1 per cent to $4.60

“We think it's highly undervalued and extremely vulnerable to be taken over,” Mr Aitken said.

He also said IAG would come under increasing pressure from its biggest investors to push Mr Hawker aside.

“Its share price would probably rise by 40 cents if they did,” Mr Aitken said.

“And I think it's interesting they've brought in Mike Wilkins as chief operating officer. The logical move for him would be to take over as CEO.”

Mr Hawker said the creation of a COO role would create an executive team structure more suited to IAG's growing international presence.

“I'm delighted to have someone of Mike's calibre join our team and strengthen the group's capability set,” Mr Hawker said.

IAG said its problems in the UK were concentrated at Advantage Insurance, a direct personal lines motor insurer it acquired in September last year.

The poorer outlook for Advantage also reflected tightening underwriting criteria and reduced participation in new business due to “issues with its rating systems,” IAG said.

Lower business volumes will also reduce the expected profit from the UK broking operations, as will the strength of the Australian dollar.

IAG also forecast an annual insurance margin between 11 and 13 per cent, replacing an earlier forecast of a return to shareholders 1.5 times its weighted average cost of capital.

IAG's insurance margin for 2006/07 was 11.4 per cent, as reported at its annual results in August. In 2005/06, it was 13.7 per cent.

Mr Wilkins stepped down as chief of Promina after it merged with Suncorp Metway.

He was credited with Promina's success in the lead up to the $7.9 billion deal.

 

[Pager]

Ive been holding this one for a while, each time its price starts to pick up, Micheal Hawker gets the pedegree chum out .

Must take the award for "Dog of the year", thats for the company, the board and the MD

Now thats what i call a triffecta

 

[bigdog]

AGM held today

SP IAG $4.47 +$0.02 +0.45% @ 13-Nov 11:30:31

ASX ANN today included:
13/11/2007 Sustainability Report 2007

13/11/2007 CEO`s Presentation and Address to Shareholders
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00782149

13/11/2007 Chairman`s Address to Shareholders
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00782148


SMH news item reported
http://www.smh.com.au/news/Business...-revenue-growth/2007/11/13/1194766633000.html

IAG says it expects 7-9% revenue growth
November 13, 2007 - 10:54AM

Insurance Australia Group Ltd has confirmed it expects to grow its premium income by between seven and nine per cent this year.

Last month, Australia's biggest insurer of homes and cars downgraded its revenue growth forecast from between 10 and 12 per cent as it faced stiff competition in the Australian and British markets.

Chief executive Michael Hawker stood by that revised forecast at the insurer's annual general meeting on Tuesday.

"With regard to our forecast for the rest of this financial year, we expect gross written premium income will grow in the range of seven to nine per cent for the year, the insurance margin between 11 to 13 per cent, that we will retain our strong capital discipline, and maintain our dividend at 29.5 cents per share fully franked," Mr Hawker said.

The insurer will also hold back on acquisitions "until the benefits of expanding into the UK are realised", he said.

It delivered a 27 per cent dip in 2006/07 profit to $552 million on the back of higher storm claims, lower investment earnings and soft markets.

On Tuesday, the IAG boss acknowledged the insurer was facing problems in the UK market after it spent almost $2 billion there on acquisitions in fiscal 2007.

Mr Hawker said the acquisitions had "some operational issues" which had prevented them meeting the expected hurdle rate of returns.

Shareholders were told IAG was dealing with two negative cycles - one in the Australian commercial insurance and the UK private motor insurance market.

"However, we have taken decisive action to manage the short term issues and position ourselves for the return to more favourable conditions as the cycles turn, as they inevitably do," Mr Hawker said.

"We are also dealing with increased frequency of weather events above our expected norms over the past two years."

A strong advocate for increased corporate awareness of climate change, Mr Hawker said the adverse weather events had even exceeded the insurer's modelling over the past two years.

"There is clear evidence that our world is warming and that this increased warming is increasing the frequency and ferocity of storms," he said.

"These changes increase the importance of insurance for the community and the challenges in ensuring that pricing reflects the risk being covered."

IAG incurred more than $500 million in gross claims costs from storm damage in Australia and the UK in 2007.

The impact, net of reinsurance, was $200 million.

At 1033 AEDT on Tuesday IAG shares were steady at $4.45.

 

[Ferret]

I have been thinking of getting a few more at these price levels.

Somebody stop me!

Ferret