Insurance Australia Group Limited ASX IAG upgrades FY26 outlook after acquisition

Highlights:

• Insurance Australia Group Limited (ASX: IAG) upgraded its FY26 guidance after completing the RACQ Insurance acquisition, expecting stronger financial performance.
• The insurer now forecasts ~10% gross written premium growth, up from its earlier low-to-mid single-digit outlook.
•  IAG shares rose 2.8% (at the time of writing) as investors reacted positively to the upgraded forecast and successful integration progress.

Australia’s major insurer, Insurance Australia Group Limited (ASX: IAG), announced on 23 October 2025 that it has raised its guidance for the 2026 financial year — at the time of writing reflecting improved prospects following the completion of its acquisition of RACQ Insurance (RACQI).

Guidance boosted

IAG now expects its gross written premium (GWP) growth to be approximately 10 per cent for FY26, up from its earlier projection of low-to-mid single digits. The insurer also raised its forecast for reported insurance profit to a range of AU$1.55 billion to AU$1.75 billion, up from the previous AU$1.45 billion to AU$1.65 billion guidance.  

Acquisition accelerates growth strategy

The upgrade comes as IAG completes the acquisition of RACQ Insurance, which it says is performing “slightly ahead of expectations” and currently being integrated smoothly. The deal strengthens IAG’s presence in Queensland and complements its longer-term target of a 15 per cent insurance margin and 15 per cent return on equity.

Market reaction & outlook

Investors greeted the update positively, with IAG shares rising in early trading following the announcement. While the insurer is benefiting from favourable conditions such as a lighter natural-perils claims period, the company remains cautious about volatility and maintains its allowance for natural-perils of AU$1.47 billion.

As IAG moves forward, attention will focus on how effectively it integrates the newly acquired business and sustains premium growth in a competitive market.

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