IAG - Insurance Australia Group

Because the speculators are becoming anxious that the IAG board will successfully defend the take over.

Question is do you lock in 15% profit today or take the risk for another 15% if QBE are successful? What would you do?

Lock in profits, wait for a clear sign as to which way things look like going then reinvest or keep your ammo dry is the concensus by the looks imo.

TheAbyss said:

Because the speculators are becoming anxious that the IAG board will successfully defend the take over.

Question is do you lock in 15% profit today or take the risk for another 15% if QBE are successful? What would you do?

Lock in profits, wait for a clear sign as to which way things look like going then reinvest or keep your ammo dry is the concensus by the looks imo.

Click to expand...

1. why would the shareholers believed that the IAG board will defend the take over after the price increased? should not they do it with the initial offer with lower price?

2. Money is yours when it is in your a/c. SP is moving everyday and it is your book value only. The question is "are you greedy??". IMO.

mapna said:

1. why would the shareholers believed that the IAG board will defend the take over after the price increased? should not they do it with the initial offer with lower price?

2. Money is yours when it is in your a/c. SP is moving everyday and it is your book value only. The question is "are you greedy??". IMO.

Click to expand...

IAG are on record as refusing both offers so not sure where you are coming from Mapna. Sellers are obviously not greedy they are locking in what is on the table.

All that is required is something positive on the offer and the SP will rise to equal value with the offer. Until then it will be in a holding pattern. Remember IAG is up significantly from its March low of $3.25 ish so a bit of [rofit is on the tabl;e to be taken at the moment already. The QBE offer will need to get near $5 to have a realistic chance of getting approval imo.

The IAG board again rejected the offer from QBE.

"QBE has withdrawn its sweetened $8.7 billion takeover proposal for IAG after the target's board last night rejected it - and IAG shares have tumbled.

IAG said after the market closed last night that QBE's offer was priced opportunistically to take advantage of the short-term weakness in IAG's share price, which it said was primarily caused by a low point in the insurance cycle."

source:
http://www.news.com.au/business/story/0,23636,23734333-31037,00.html

Maybe a hostile take over? or maybe a better offer from QBE as TheAbyss said. Either way I'd be pretty "comfortable" holding IAG shares

anyone think this stock is attractive at current levels of about $3.40?
good fully franked yield...

Dan,o I'd leave for few weeks. New co will give company update. They are still a crap company and the industry is soft, but if QBE were prepared to pay +$4.00, good upside.
Only concern is the div. don't know if they can keep it up.

I don't think it would be a surprise if they do cut the dividend, and I think the market knows that.

Nevertheless, I think IAG is looking quite attractive as a takeover play. I'll be very surprised if QBE don't come back in the next few months, probably just with the same offer as before. Given the way the share price has tanked since QBE walked away a month ago, there would be alot of pressure on the IAG board to treat a second offer more seriously.

I haven't been following the QBE price, but I guess a bid on the same terms as before equates to around a 30% premium to the current IAG price.

Ferret

Got an offer in the mail to buy additional shares without brookers fees (forgot I had shares in this company until after I tore up the loetter thinkin git was spam). Anyone taking up the offer and what's the current feel on their sahres right now?

...by the lack of responses I'd say no. I'm leaning towards no - burnt by the last SSP.

Why is that bow-tie wearing git still the chairman?

Just a friendly reminder to all IAG shareholders that the SPP payments have to be done by the close of business tomorrow. The share price at this moment is $3.49, the offer is $3. There is a good opportunity to make money out of this, good luck to you all.

The IAG share price has been increasing; volume was VG yesterday!!
Date....... Close Chge Volume
31-Mar-09 3.50 0.12 11,162,822
30-Mar-09 3.38 -0.01 3,156,383
27-Mar-09 3.39 -0.09 7,584,572
26-Mar-09 3.48 0.01 7,523,116
25-Mar-09 3.47 0.08 7,182,743
24-Mar-09 3.39 0.01 5,195,701
23-Mar-09 3.38 -0.02 3,518,895
20-Mar-09 3.40 -0.05 6,502,164
19-Mar-09 3.45 -0.06 17,937,096
18-Mar-09 3.51 0.01 8,816,503
17-Mar-09 3.50 0.10 6,175,018
16-Mar-09 3.40 0.03 7,555,861
13-Mar-09 3.37 0.07 7,834,122
12-Mar-09 3.30 0.08 3,204,399
11-Mar-09 3.22 -0.01 7,313,560
10-Mar-09 3.23 0.17 6,107,495
09-Mar-09 3.06 0.00 8,133,414



http://www.theaustralian.news.com.au/story/0,,25271622-36418,00.html?from=public_rss

IAG revamps sustainability strategy to insure future

Sara Rich | April 01, 2009
Article from: The Australian

INSURANCE Australia Group says a massive overhaul of its approach to sustainability has meant that despite the global downturn the company is close to reaching its full potential.

In July last year IAG, whose brands include NRMA, RACV and CGU, announced a new corporate strategy and operating model designed to improve its efficiency and ultimately make the business more sustainable.

IAG chief executive Michael Wilkins said yesterday that the approach addressed all aspects of the business -- economic, customers, workforce, environmental and community factors -- not just issues associated with climate change, which some companies were stuck on.

"More recently I think the concept of sustainability has become very much skewed towards the environment and towards community concerns," he said at an American Chamber of Commerce lunch in Sydney.

"I think sustainability is far more than that -- to me the sustainability of a business is predicated on its financial viability, the strength and loyalty of the customers and franchises it has, the skills and engagement of the people, and a recognition of and response to the impacts the organisation has on the wider community and on the environment.

"It was with this is mind that we refined our approach to sustainability at IAG."

The strategy involved restructuring and simplifying the Australian operations, shedding some of the less profitable businesses in Britain and pursuing growth opportunities in Asia.

It also focused on promoting greater brand awareness through a series of advertising campaigns and reducing its environmental footprint.

"If we get it right, we are sustainable; if we don't get it right, we will ultimately cease to exist and someone else will get it right," Mr Wilkins said. "But, we believe that by refining our approach to sustainability ... we have given ourselves a considerable chance.

"If we continue to do that then I believe IAG can reach its full potential."

In February, the company announced that first-half profit had fallen 96 per cent to $4 million because of investment losses and a loss on the sale of some of its UK operations, but that insurance profit was up $190 million at $227 million.

IAG's share price climbed 12c, or 3.55 per cent, yesterday to close at $3.50.

Three ASX ANN today
06-04-2009 09:26 AM IAG 2009 Interim Report to Shareholders
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00942188

ANN includes:
IAG’s insurance profit was up 19% to $227 million compared to the previous corresponding period, representing an improved insurance margin of 6.2%, up from 5.1%.

Our net profit after tax of $4 million was significantly impacted by a $148 million reduction in investment income on shareholders’ funds compared to the previous corresponding period due to weak investment markets, and one off costs associated with the divestment of underperforming businesses during the half.

We expect further improvement in our underlying performance over the remainder of the 2009 financial year, as a result of our strengthened executive team, efficiency programme, disciplined underwriting and exit from our poorly performing mass market operations in the UK.


http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00942186
IAG advises that ordinary shares to be allocated under the Company’s Dividend Reinvestment Plan (DRP) will be priced at $3.4320 per share for the dividend payable on 8 April 2009.


06-04-2009 09:20 AM IAG Share Purchase Plan Results and Sterling Debt
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00942185
New shares issued under the Share Purchase Plan will commence trading no later than Wednesday 8 April 2009. Holding statements will be mailed to participating shareholders from Thursday 9 April 2009.

IAG Share Purchase Plan raises more than $84m; and additional subordinated debt repurchased



Looks like market liked ANN but then again market up 6% after opening
IAG $ 3.39 +$0.020 +0.59% @ 06-Apr 10:05:37 AM

IAG share price was up 15 cents yesterday to close at $3.92

There have been serveral large after close trades

14-08-2009 09:32 AM $3.920 21526 $84,381.920 ETF Special Trade,Crossed
13-08-2009 05:16 PM $3.770 52828 $199,161.560 Portfolio Special Crossing,Crossed
13-08-2009 04:49 PM $3.770 105656 $398,323.120 Portfolio Special Crossing,Crossed
13-08-2009 04:36 PM $3.920 699116 $2,740,534.720 Portfolio Special Crossing,Crossed
13-08-2009 04:34 PM $3.920 337820 $1,324,254.400 Portfolio Special Crossing,Crossed
13-08-2009 04:10 PM $3.920 45713 $179,194.960

The share price was looking VG until Aug 21!!

Date...........Close Volume
21-Aug-2009 3.55 25,890,398
20-Aug-2009 3.80 12,127,988
19-Aug-2009 3.81 9,760,908
18-Aug-2009 3.86 6,921,963
17-Aug-2009 3.84 6,817,791
14-Aug-2009 3.98 8,538,539


http://www.theaustralian.news.com.au/story/0,,25963000-36418,00.html?from=public_rss

IAG falls as profit fails to impress
August 22, 2009
Article from: The Australian

INSURANCE Australia Group is back in the black for the 2008-09 financial year. But its result disappointed the market because of a fall in investments, increased claims and a weak performance from CGU.
Australia's biggest general insurer said net profit for the year to the end of June recovered to $181 million, after a loss of $261m previously due to a $400m restructuring and impairment charge.

However, the result was significantly below analysts' expectations -- market consensus was for a $253m profit -- causing its share price to fall 6.58 per cent to $3.55.

Directors have cut final dividend from 9c to 6c a share, taking the total payments for the year to 10c, compared with 22.5c the year before.

Chief executive Michael Wilkins said the result might have been below expectations because of some one-off costs, including a loss on the sale of its British motor business, and a $39m loss on the investment of its shareholder funds.

Insurance margins -- a critical measure of an insurer's profitability -- jumped from 5.4 per cent a year ago to 7.1 per cent and are expected to continue growing this financial year.

But the result was below guidance provided at the beginning of 2008-09, when IAG said it expected to produce a full-year insurance margin of 10 per cent, due to a number of severe weather events costing $451m in claims and a significant decline in financial markets.

"We acknowledge that the result is less than where we started the year with, but when you look at the impact of volatile investment markets, the fact our natural perils claims, which included the Victorian bushfires, were $140m more than we anticipated and we had the impact of credit spreads and a number of other issues, I am pretty satisfied with where we are," Mr Wilkins said.

Gross written premium, a standard measure of insurance revenue, grew slightly from $7.793 billion to $7.842bn, representing a 4 per cent jump in underlying gross written premium, after excluding foreign exchange impacts and businesses divested during the year.

Insurance profit increased 31 per cent to $515m from $392m a year ago.

Premium rates in Australia increased by 5.3 per cent within IAG's direct business -- NRMA Insurance, SGIO and SGIC -- and by 6 per cent across its commercial portfolios.

Prices were up 4.4 per cent in New Zealand, 5-7 per cent in Britain and 2-3 per cent in Asia.

Mr Wilkins, who was appointed in May last year and had focused on rebuilding IAG by divesting unprofitable assets, cutting costs and raising premiums, said he expected the rate increases would continue this financial year and he was confident the company's performance would improve further.

He is expecting 3-5 per cent growth in underlying gross written premium and an insurance margin of 9-11 per cent for the full year.

"This will be on the back of higher premiums, ongoing operating efficiencies, improved underwriting discipline and hardening market conditions," Mr Wilkins said.

But he admitted "there is still more work to do".

He said the turnaround strategy for CGU, whose full-year insurance profit fell by more than half to $48m, was taking longer than expected due to the tough economic and market conditions, while IAG's New Zealand business had only just broken even in 2008-09.
531

Shares Issued 2,078,994,021 Market Capitalisation $8,336,766,024
52 Week High $4.1300 52 Week Low $2.9400

http://www.bloomberg.com/apps/news?pid=20601081&sid=aBzgaOWo.RpU

IAG Shares Gain in Sydney on QBE Takeover Speculation (Update2)
By Shani Raja

Nov. 18 (Bloomberg) -- Insurance Australia Group Ltd. rose the most in more than a week in Sydney trading on speculation QBE Insurance Group Ltd. is considering a takeover offer.

Shares in IAG, the nation’s largest insurer of cars and houses, climbed 2.3 percent to A$4.01 at the close of trading on the Australian stock exchange. QBE shares rose 2.5 percent to A$23.01.

QBE may be considering a takeover offer, the Australian Financial Review reported in its Street talk column, without citing anyone.

A spokeswoman for Taurus Marketing, QBE’s press agency, declined to comment. Emma Foster, a spokeswoman for IAG, also declined to comment.

In May 2008, QBE withdrew an A$8.7 billion ($8.1 billion) offer for IAG aimed at creating Australia’s biggest insurance company.

“A takeover of IAG would make strategic sense,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “We know QBE has an aggressive policy of growing the business through acquisitions and we have seen an offer before.”

Street Talk in the AFR says QBE Insurance (QBE) is running the numbers on Insurance Australia Group (IAG) again. It is believed QBE will make a move for IAG sooner rather than later and this time around offer a reasonable price that the IAG board will seriously consider. The news hasn’t done much for the IAG share price which is only up 5c to 398c. QBE up 39c to 2283c.
6793

Looks like the market like that articles published on Insurance Australia Group on speculation QBE Insurance Group Ltd. is considering a takeover offer.

IAG 4.21 +0.200 +4.99% high of $4.21 20,553,184 shares $85,387,823 @ 19-Nov 04:27:58 PM

The volume today at 20,553,184 shares was the fourth highest for the year!

http://www.news.com.au/couriermail/story/0,20797,26674094-3122,00.html?from=public_rss

IAG profit jump lifts shares in insurance sector

Kerrie Sinclair
February 04, 2010 12:00am

A STRONG improvement in Insurance Australia Group's six-month insurance profit margin has fired up shares across the Australian insurance sector.

But analysts said it wasn't clear that expectations for long-term insurance margins should be revised sharply higher, which might restrain price gains.

IAG shares closed up 4.5 per cent at $3.96, with Suncorp up 5.9 per cent to $9.27.

QBE Insurance Group shed an initial 1 per cent gain to close flat at $23.10.

Sydney-based IAG said its insurance profit margin for the six months to December was likely to be 13.4 per cent, more than double the 6.2 per cent achieved in the same period a year earlier.

It said its full-year 2010 insurance profit margin was now likely to be in a range of 11.5 to 13 per cent, up from its prior forecast of 9-11 per cent.

It said this reflected lower claim costs from natural disasters, totalling $121 million, against the $166 million it had allowed for, as well as $80 million in reserve releases and a $28 million net gain on favourable movements in credit spreads. A year earlier it booked an $86 million net loss on credit spreads.

Analysts said a worsening in bodily injury claims in the UK was the only negative in yesterday's statement.

IAG is Australia's largest general insurer in terms of written premiums, with about $7.8 billion in premiums annually. It expanded into the UK, Thailand, Malaysia and India in the past few years and its brands include NRMA Insurance, SGIO, CGU and Equity Red Star in the UK.

Macquarie Private Wealth senior investment adviser Helen Spencer said the "apparently stunning" improvement in IAG's first-half 2010 insurance margin suggested positive market surprises were also likely from Suncorp and QBE.

But she said the key issue was the extent to which the market adjusted expectations for long-term sustainable margins.

Macquarie is likely to upgrade is fiscal-year 2010 net profit forecast for IAG by 12.5 per cent and by about 5 per cent for fiscal 2011, but it yesterday kept its underperform rating on IAG shares.

Citi analysts Nigel Pittaway and Mark Tomlins said IAG's first-half insurance margin result had beaten their forecast of a 10.9 per cent margin.

IAG did not yesterday detail its divisional performance, but Citi estimated IAG's insurance profit was $88 million above the forecast, with reserve releases up to $40 million over the forecast.

They said a bigger-than-expected $30 million to $35 million improvement now appeared likely from IAG's underlying operational performance.

Citi analysts kept their "hold/medium risk" recommendation on IAG shares and said Suncorp shares might be the best stock pick of the sector.

What's everyones opinions of IAG future given the hype surrounding the potential QBE takerover is all but gone?

Any roadblocks for future growth?

Personally I think the biggest threat to IAG is the banks, Commonwealth has a good model in S.A has a dominant market share and will expand its insurance services into other states.

It has the capital and the expertise to take a severe chunk out of IAG's market share.

Having said that the dominant position it holds in NSW through NRMA should hold it in good stead for a long while, growth wise I think it's scope is limited.

Pallen said:

What's everyones opinions of IAG future given the hype surrounding the potential QBE takerover is all but gone?

Any roadblocks for future growth?

Personally I think the biggest threat to IAG is the banks, Commonwealth has a good model in S.A has a dominant market share and will expand its insurance services into other states.

It has the capital and the expertise to take a severe chunk out of IAG's market share.

Having said that the dominant position it holds in NSW through NRMA should hold it in good stead for a long while, growth wise I think it's scope is limited.

Click to expand...

I don’t know about Commonwealth Bank being a long term threat to any insurer in Australia. Changes due soon under Basel 3 and Solvency 2 make it less favourable for a Bank to own an insurance sub. Insurance analysts expect a wave of M&A as banks dispose of their insurance subsidiaries and I don’t see particular reason for banks in Australia to buck the trend.

Australian banks don't need to worry about IAG's stronghold in insurance premiums, though other health insurance australia programs may have to diversify their insurance services to gain advantage of what is left in the market share.