Hi. Morning, everyone, and welcome to IAG's FY26 results presentation.

I'm joined here today by our Chief Financial Officer, William McDonnell, together with members of the executive team who are all sitting in the front row here in our offices. We're holding today's event in IAG's Sydney office on the lands of the Gadigal people.

We acknowledge the traditional owners of country throughout Australia, and we recognize their continuing connections to lands, waters, and communities. Of course, I pay my respects to elders past, present, and emerging.

This has been a strong year for IAG, and I'm really proud of what we've delivered. We've refreshed our strategy, and we've sharpened our strategic priorities, as we've set out on this slide.

Of course, our purpose is unchanged: we make your world a safer place. As part of this, we act as an economic shock absorber across Australia and New Zealand at an individual, at a community, and at a business level.

Our growth-orientated strategy is all about helping more of Australia and New Zealand. We'll do this by leveraging the strengths of IAG and the investments we've made to help more people and more businesses across our two countries.

This has been a year of delivering. Our financial results reflect the deliberate strategic choices we've made to grow our business, reduce our volatility, and importantly, deliver sustainable, growing shareholder returns.

At our top line, our premiums have grown by 7.6%. This includes strong growth momentum in our direct retail businesses in both Australia and New Zealand of around 5%.

Importantly, we've seen strong quarter-on-quarter improvement that I'll touch on later in those two businesses. Underlying insurance profits was up 2.3% to nearly $1.6 billion, and the net profit after tax was just over $1 billion.

This, combined with our strong capital position, has enabled us to increase our final dividend by 5% to 20 cents per share, and pleasingly, with our franking on that 20 cents increased to 80%. Our positive momentum provides the foundations for our FY27 guidance of continued strong top line combined with growing earnings.

More broadly, we successfully completed the acquisition of RACQ Insurance in September last year, and we're pleased with the integration momentum and our member retention within that. That alliance contributed $1.3 billion of premium for the 10 months that we owned it in last financial year.

As we discussed in February, the severe Queensland storms, which occurred before the RACQ business came under our reinsurance arrangements, did impact our first-half results. Our second-half performance, though, was strong, and the business is on track to meet all of our expectations we had when we purchased it.

Across the whole business, we actively responded to 65 weather events in Australia and 44 in New Zealand. We paid more than $12 billion in claims to support our customers and their communities to recover.

We know our customers recognize the role we play and the dedication of our teams, with our NPS scores up 55 in Australia and 63 in New Zealand. What those scores are, really are the sort of top-quartile performance in our industry.

We continue to work through the process with Western Australia and remain confident this will be completed in FY27, and we're excited about the prospect of welcoming the RAC insurance team into IAG. Then finally, on this highlight slide, we've flagged the acceleration of AI that is helping drive efficiency and better customer experience.

At the Investor Day that we held in May, the team talked a lot about the extensive technology transformation taking place at IAG and the tangible benefits that transformation is delivering. More than 60% of our people are regular users of AI.

We have more than 600 activators who've published more than 90 AI agents to improve workflows in areas like customer service, operations, and within our corporate functions. Over 2,000 employees using AI in claims, fraud, and service, and delivering significant benefits to our claims costs that we are reinvesting for growth.

We've also recently signed a landmark partnership with OpenAI that will help our people deliver faster and more effective customer service, particularly within our claims teams. Our initial focus will be on where the need is greatest: scaling our claims-handling capabilities during natural disasters and severe weather events.

This initiative represents the next step in our AI journey, reinforcing our commitment to responsible, customer-led innovation. Growth is a strategic focus for us.

As you can see here, our 7.6% growth in premiums to $18.4 billion has been delivered across our key brands and channels, boosted by the 10-month contribution from RACQ. On an underlying basis, though, our premiums grew by around 2%.

Importantly, though, within this, our direct retail businesses in Australia and New Zealand grew at around 5%. These are our growth engines, and including RACQ, these represent around 60% of the entire IAG business.

Both of our direct businesses in Australia and New Zealand have strong momentum as a result of the strategies we've put in place. We are growing where we want to grow.

You'll see on this slide, and we're showing here this on a quarter-on-quarter growth in our businesses, what they've done is they've continued to accelerate throughout the year driven by both volume and price. You can see here, combined, they deliver growth of around 7% in the final quarter of FY26, and we expect this to continue into FY27.

In addition, we'll have a full year of RACQ premium and the potential additional benefit of RAC in WA. In Australia, price has been the key driver, with recent improvements in net volume growth in both NRMA Insurance and RACV.

In New Zealand, growth has been primarily volume driven, with strong AMI organic growth supported by the transfer of Aon into that business. Going forward, we expect New Zealand growth will be supported by a mix of both volume and by price.

This is real momentum, and what that does, of course, it sets us up well. The markets we operate in are structurally growing, with general insurance premiums in both Australia and New Zealand forecast to grow at around 6% per annum through to 2030.

With clear strategies and strong leadership, we have the brands, technology, and distribution to grow and protect more customers across our two countries. Turning now to some of the individual businesses, let me start with the Australian retail, which is, of course, the largest part of IAG.

This business delivered strong headline premium of 17.8%, or an underlying 4.5% after excluding RACQ. Retention rates are strong, and Julie and the team have done a great job to deliver home growth in line with market, and what's really is a competitive market.

In motor, our recent trends have been very favorable, contributing to the 6.7% direct growth that we saw in the final quarter of the financial year. The core direct business of NRMA Insurance and RACV are performing well, while our bank partner business has been slightly weaker over the last 12 months.

Underlying profits were up 7% to $846 million, and our reported insurance profit was down slightly due to some of the perils that we had in the first half from RACQ. If we exclude that, the reported insurance profit was up 7% and significantly stronger in the second half versus the first.

The business is clearly benefiting from the implementation of enterprise platform, improved risk selection, and sales and service processes that we've heavily invested in. Our NPS is strong at 55, and NRMA Insurance has continued to be the most trusted insurance brand in Australia.

These provide the foundations for our positive growth going forward. In New Zealand, our retail business delivered a strong result: premium growth of 3.7% in local currency, with a strong direct growth of 5% reflecting market share gains.

We had 7% growth in motor driven by strong retention rates, improved customer satisfaction, particularly within our AMI brand, where we continue to expand the AMI motor hub sites, and we've also transitioned Aon customers. Bank and partner businesses has also shown some similar trends in New Zealand to what we've seen in Australia, it's been slightly weaker.

During the year, we've completed the migration of the core AMI and State motor and home portfolios onto our retail enterprise platform. Of course, what this does is improves underwriting, pricing, and customer experiences, providing strong platform for continued growth of this business going forward.

Underlying profits grew by 10.7% in local currency, where we've seen improved loss ratios from better risk selection, claims handling, and the claims supply initiatives that were put in place. Reported margins remain strong at over 20%, but they were impacted by the increase in natural perils this year compared to last.

Pleasingly, like Australian retail, our NPS score lifted by 9 points to 63, and these strong customer metrics position the business well for sustained top-line growth into FY27. Turning now to the other side of the business, the intermediated business.

I'll start first with Australia, where Jared and the team have delivered stable premium and underlying profits, and of course, what is a challenging market. What this does, it reflects a disciplined approach to underwriting and a resilient business mix our business has.

We're focused on segments where our brands, customer relationships, and specialist capabilities create a clear source of competitive advantage. As a result, we saw growth in our short-tail commercial lines and around 10% growth in WFI, which, of course, is our rural business.

Strong cost management improved the expense ratio here by 140 basis points. We're prudent reserving and claims management have delivered $78 million in reserve releases here as well.

Reported profits remain solid at $316 million, despite a $71 million perils impact within this business, and that's primarily from the Victorian bushfires in January. William will explain this later, but the adverse impact in CGU was more than offset by favorable experience in other parts of our company.

During the year, we delivered important commercial enterprise platform capabilities, and what we're doing now is we're accelerating those plans into FY27. What this, of course, is going to do: improve underwriting, simplify our process to support targeted growth through WFI and some of our other priority segments.

Across the Tasman, the intermediated business in New Zealand, which represents around 8% of IAG, continues to navigate a soft market, with premium declining 11% in local currency terms. Of course, what we've done here is we maintain our strong discipline as that New Zealand commercial market suffers sort of intense competition from global capital.

Our underlying profits of New Zealand $133 million reflect solid 14% margin after highly profitable FY25. Reported profits were down a third, largely due to the impact of increased perils.

More importantly, we are seeing signs of the market stabilizing in New Zealand, with commercial SME lines expected to be broadly flat in FY27, and we do expect some growth within our personal lines business here within NZI. Phil and the team are responding well with disciplined, targeted premium increases, strong broker service, continued focus on costs, which is serving us well in this point in the cycle.

To step back and look at our overall profitability, and the underlying insurance result of $1.58 billion was up $36 million. The reported profit was around $1.55, and that's consistent with the guidance that we've provided to the market in February.

Importantly, this is a quality result. It does include the settlement of significant portion of the Greensill proceedings, confirming our announcement that we made in May that this would not have a material impact on the group's financial result.

The trial on the remaining claims is due to commence on the 14th of September. We will continue to defend these proceedings, and with the potential for settlement discussions coinciding with the pricing period, what we've done is we have suspended our DRP for next month's dividend.

In relation to RACQ integration and the amortization costs, we have not taken anything below the line, all of those costs associated with RACQ are in our underlying and reported margins. Key drivers of the quality of our numbers is the 50 basis point improvement in the underlying claims ratio and 120 basis point improvement in our expense ratios.

What, of course, this does is gives us the confidence that we can continue investing in growth while delivering strong, sustainable earnings profile. Many of you will be familiar with this slide, which we showed at our Investor Day in May, when we unveiled Ambition 2030 and defined our success metrics.

What the slide does, it shows our winning formula and our key performance drivers, many of which are evident in today's results. We continue to build on our portfolio of leading brands, leveraging our data and our technology, integrating our supply chain model, which is very important in our business model.

Of course, our diversified distribution model is helpful, and our claims management expertise is giving us a competitive edge. Combined, of course, what these do is drive outcomes for our customers, our shareholders, and of course, importantly, for all of our people.

With our capital-light balance sheet and low-vol earnings model, these underpin our growth and strong investment proposition from a shareholder perspective. Our winning formula is delivering strong growth momentum at IAG.

With that, I want to hand over to William, who's going to run through the financials in a bit more detail.

Thank you, Nick, and good morning, everyone. I'll start with the financial summary shown on slide 16.

At a high level, we're pleased with our FY26 outcomes relative to the FY25 results, which was assisted by benign perils and a release from the business interruption provision. Nick has discussed the positive growth and profit momentum in our retail businesses and our disciplined and resilient approach to the commercial cycle.

Our second-half performance has been strong, and the negative movements on this slide relate to the one-off transitional impacts that we outlined at the half-year results back in February. I'll run through some of the key technical aspects of the result to demonstrate the quality and stability of our earnings, the improved efficiency, the core business momentum, and the strength of our balance sheet and capital position as we enter FY27.

Starting with our reinsurance program, the increase in reinsurance expense reflects portfolio growth, the inclusion of RACQ Insurance, and the additional protection provided by our expanded quota shares from 32.5% to 35% from the 1st of January '26. Non-quota share expense increased by around 15% to $1.34 billion.

Most of the increase relates to RACQ Insurance, including specific catastrophe cover costs, reinstatement premiums following the severe first-half weather events, an increase in cyclone reinsurance pool costs, and incorporating RACQ Insurance into our long-term perils volatility cover. Importantly, we've achieved the targeted annual reinsurance synergies of more than $50 million, and this provides a material benefit heading into FY27.

Turning to FY26 perils, the group recorded net peril costs of $1,579 million, which was nearly $500 million higher than FY25. We finished the year $114 million above the net peril allowance, which was primarily attributable to the RACQ severe perils experience that we had in the first half prior to it being incorporated into the IAG program.

Additionally, at the half year, the rest of the group's perils was stabilized by the peril volatility cover. The second-half result was much stronger, and therefore, the peril volatility cover stabilizer unwound, and we ended with net peril costs $38 million below the allowance.

In terms of our divisions, I've shown in the bottom right that for the full year, RIA and New Zealand came in below allowance, and you'll see that IIA finished the year $71 million above allowance, with the Victorian bushfires in January having a major impact, as Nick mentioned. Overall, the net of these equates to the $38 million favorable outcome.

Looking ahead to FY27, our perils allowance increases by only 2% to $1.49 billion. This increase is below net earned premium growth, and it includes a full year of RACQ Insurance within the group reinsurance program.

Coming back to the perils upside that Nick mentioned, I'm sharing again here how our long-term perils volatility cover works to protect downside in over 95% of modeled scenarios, while importantly, the upside benefit is retained, as we presented at our recent Investor Day. The top chart shows the pattern of peril outcomes we faced before taking this cover into account.

For each of the three remaining years of the contract, the cover provides around $1 billion gross of downside protection. Applying that, the net pattern of likelihoods, the lower chart, is very different, with little downside risk, but with upside likely to materialize around one year in two.

In a favorable year, the average upside is over $200 million, giving us the modeled net peril upside across all years of over $100 million, or approximately 1% of reported insurance margin. This is because we set our perils allowance in line with the attachment point of the peril protection, rather than having a gap and setting it lower, while the cost of the protection is already included in our insurance margin.

We believe this detail further highlights the quality of our reported insurance margin guidance. In terms of the underlying claims, which exclude all perils, reserving, and discount rate effects, the ratio improved by 50 basis points to 51.6%, and with further momentum through the year, with the second-half ratio improving to 51.2%.

Some specific callouts for each division: in RIA, we saw a modest improvement in motor frequency; however, in home, we experienced higher claims inflation. Across long-tail lines, commercial claims in IIA and CTP experience was broadly in line with expectations.

In New Zealand, the underlying claims showed a material improvement, including the benefit from lower frequency in the home contents portfolio. The overall improvement reflects continued benefits from our claims transformation program, which includes supply chain efficiencies.

Disciplined execution of these projects are delivering claims benefits of around $350 million per year. On costs, we continue to deliver disciplined expense management and are seeing the benefits of prior investment in transforming the business.

The admin expense ratio improved by 60 basis points to 11.6%, including a 100 basis point improvement in the second half compared with the prior corresponding period. We'll continue to invest in FY27, with a focus on AI and tech modernization, improving productivity and customer outcomes and the long-term scalability of our business.

Importantly, we expect the group admin expense ratio, excluding levies, to reduce to below 11% in FY27, achieving the target that we set in 2024. This reflects both continued cost discipline and the benefits we expect to realize from our transformation program.

We continue to anticipate further cost reductions in our business, allowing us to accelerate our investments, including in AI, in order to grow and transform. Investment income, while lower than FY25, was a solid contributor, supported by underlying income from technical reserves and strong equity returns in shareholders' funds.

Technical reserves reported investment income of $246 million, including a $136 million negative mark-to-market impact from the increase in risk-free rates. The underlying investment income remains strong at $378 million, representing an underlying yield of 4.8%.

Additionally, the FY26 exit yield of around 5.5% provides a supportive starting point for FY27. Shareholders' funds reported investment income of $383 million.

This was driven by strong returns in our equities portfolio, while fixed interest returns were reduced by negative mark-to-market movements as risk-free rates rose. The shareholders' funds portfolio remains defensively positioned, with a growth asset weighting of 28%.

The year-on-year increase in growth assets primarily reflected a higher infrastructure allocation, partly offset by a reduced allocation to higher-yielding credit. We finished the year with a strong capital position, with our CET1 multiple at 1.14 times, above our target range of 0.9 to 1.1.

Strong second-half earnings more than offset returns to shareholders from the dividend and buyback. During the second half, we completed the $200 million buyback that we announced in February.

This reduced the share count by approximately 27 million shares at an average price of around $7.30. In terms of other movements, the reinsurance recovery timing headwind that we recognized in the first half unwound as we expected.

We also recognized the temporary capital impact of over $100 million relating to the profit commission recognition, equivalent to 4 points. There were modest headwinds from growth in the PCA charges and the weaker New Zealand dollar.

Overall, we remain strongly capitalized. Our strong capital position has supported a 20 cent final dividend, up 5%, bringing the full-year dividend to 32 cents per share.

The full-year dividend represents a payout ratio of 73%, and we've also increased franking to 80% in the second half. Looking ahead, we expect dividends to be 80% to 100% franked in FY27 and going forward.

Together, the increased dividend and completed buyback demonstrate our capacity to return capital to shareholders while continuing to fund growth and invest in the business. Finally, this slide shows our indicative capital position after allowing for the announced RAC Insurance acquisition.

Starting from a CET1 multiple of 1.14, the final dividend reduces this to 0.98 times. We're not providing FY27 NPAT and dividend guidance, but you can see, similar to our previous approach, we've included a benefit to capital that's broadly in line with consensus earnings and dividend expectations.

We've also included a 10 point impact of other capital movements, and this includes potential benefits from our capital-light strategies that I've previously discussed. The RAC Insurance acquisition is expected to result in an indicative pro forma position in the middle of our target range of 0.9 to 1.1, and we remain comfortable operating toward the lower end of the target range, given the reduced volatility provided by our comprehensive reinsurance protections.

With that, I'll now hand over back to Nick.

Hey, thanks, William. Build more resilient communities across Australia and New Zealand, which is really core to Ambition 2030 and our community pillar.

What we've done is we set a clear 2030 goal to help Australian and New Zealanders take more than 2 million actions to help to better understand their natural hazard risk. This includes digital tools, face-to-face community workshops, and some practical guidance.

We're also continuing to share our research and our data and our insights to support national resilience. This includes our commitment to recognizing effective, large-scale risk reduction activities in insurance pricing through our participation in the federal government's Hazards Insurance Partnership.

It's critical that insurance remains accessible and affordable across Australia and New Zealand. Where we see resilient actions that materially reduce risk, our insurance costs need to come down.

We're backing this up with our own investments, including the multimilion-dollar NRMA Insurance Help Fund and our new investments from our venture fund, Firemark. A great example is SpaceCube: modular housing that can be deployed quickly for customers after major events, taking pressure off the country's housing and construction challenges.

It was great to see this in action in regional Victoria in January following the devastating bushfires, where we were keeping customers comfortably on their land during recovery. Moving to guidance, and the confidence in our underlying business is reflected in our FY27 guidance.

This includes 5% to 8% premium growth, with volume growth and targeted premium increases and a full year of RACQ. We anticipate underlying growth in our retail businesses of mid-single digit, and we anticipate low single-digit growth in the intermediated businesses trans-Tasman.

In FY27, we expect our reported margin guidance to be between 14.5% and 16.5%. The midpoint of this is above the 15%-plus margin that we outlined in the Investor Day, and really forms the basis of our 15% ROE, high single-digit EPS targets, with IAG well set to deliver on this on a sustainable basis.

You can see how the actions we've taken have delivered a materially improved financial profile in recent years. We are delivering more consistent, growing earnings profile.

As we head into FY27, the midpoint of our reported insurance margin guidance represents a 9% increase on results delivered this year. In addition to this, as William explained, our perils modeling shows that there is an extra average upside of over $100 million a year from perils.

Based on the momentum in our business and the perils protection we have in place, we're confident on what we'll deliver. Just let me finish with this: the past 12 months has been a period of delivery for us.

I'm proud of the company, our people, and the strong positioning we have for FY27. We will continue to be a customer-obsessed economic shock absorber supported by our scale, our brands, and the platforms that we've built to service our customers.

Ambition 2030 outlines clear goals for our customers, our communities, and our people. Importantly, for our shareholders, we'll deliver an ROE of 15% or above, high single-digit earnings per share, and top-quartile shareholder returns.

William and I are now happy to answer any of the questions. Why don't we start in the room, and I think Mark's got the microphone handing around to Kieren.

Hi, mate.

Morning. Kieren Chidgey from UBS.

Nick, I've three questions. I'd like to start on GWP on the trends you showed on slide 8 on the quarterly progress in direct retail in Australia and New Zealand.

Can you just unpack in a bit more detail by product, and I guess, unit and rate, what you saw particularly through that fourth quarter?

Yeah. That's sort of a demonstration, I think, of the things we've been doing over the last couple of years starting to come together and really creating some real momentum.

Sort of breaking that down, we've definitely seen home volume growth as part of that. That's together with continued prices flowing through.

I think we'll start with Australia, then we'll move to New Zealand. We've got that low single digits, 1 1 and a bit percent volume growth as well as prices flowing through in that home portfolio.

Motor, that probably was a trend that we were doing well in the first half. I think the big change first half second half has been more about motor, where we were definitely had some challenges, we talked about that at the half and in the February for the first-half results.

We've definitely seen a reversal in the second half, and we're seeing both price and volume growth there. We're winning new business.

That's really helping us, which was sort of slightly disappointing second quarter, call it that. You can see third and fourth quarter we're really seeing both of that flow through.

That sort of 7% in total growth within the direct retail business in that last quarter was very positive, right? That's really a result of lots of things we've been doing in our company.

We're really feel pretty excited about that. New Zealand is probably more of a volume story.

There's a bit of price that's flowing through. There's also Aon that's come in, and that's sort of equal quarter on quarter on quarter, but it's definitely amplified each of those quarters.

Now all that will run off, and we think we'll see in FY27 in New Zealand a bit more price in there as well as continuation of volume. That's kind of the story.

Thanks. Second question just on margins in two different areas.

New Zealand intermediated obviously under significant pressure in second half down to 8.9%. I guess I'm just surprised at the pace of decline there half on half from 18% in first half.

If we look at your GWP and, I guess, the earn-through of the premium into '27, I'm interested in where you see that margin headed into '27.

Sure. That's a tough market.

We sort of highlight it's 8% of our company, but we're very focused on it. It's a real challenge for Phil and the team there.

Our business is 10% down year-on-year essentially in NZI in New Zealand in local currency. What we can observe now, and we saw this at June renewals, cuz remember, we have some of these big dates in that.

It's more lumpy, yeah, that business. We saw a continuation in July.

We've definitely seen a slowdown in the rate of decline. Where that was double, for run rates minus 10, which not great, that's definitely slowed down a lot, as in it's sort of now minus 5, call it that.

We're expecting that to continue. Although in our guidance, we did say low single digit for intermediated, we probably mean a couple of percent in Australia and probably 0 to minus a little bit, 1% or 2% in New Zealand.

That's probably the blend. Zero would be a good outcome, I think, for FY27 in NZI.

In relation to margin, we're just maintaining that discipline. I don't see it keeping reducing.

We're not reducing the price 10% per risk. We've lost volume, too.

I don't see that trend down. I see that sort of stabilizing around where it is in FY27.

The second part of that margin question was RACQ's 6.3% underlying second half, still well shy of where the group looks to operate. Where do you see that moving in '27,

and

can it hit the 15%, or is that still more a '28 target?

It's definitely lifting up. I would expect it to be double digit and getting closer, but maybe not at the full 15% in FY27.

We are putting all the costs in there as well, remember, we're sort of not burying anything below the line. It's obviously second half better than first half.

We expect '27 to be a lot better than '26, maybe not at the full 15 to your comment, and '28 we'd expect it to be there.

Just a final quick question for William. Page 146 of your annual report has an interesting comment on reinsurance profit commissions that you can sustain the '26 run rate unless the gross loss ratio deteriorates by more than 5%, which would be quite disastrous at a group level.

If the gross loss ratio's sustained, how much upside is there in reinsurance profit commission?

Thanks. We book the profit commission in a conservative way, we do risk-adjusted, as we indicated in that note.

You'd expect it to gradually build towards the maturity date of the respective contracts. Broadly we're expecting a similar amount in '27 to '26, but it will gradually build over time.

Hi. Freya Kong from BofA.

Just on the group margin outlook again, is 15% underlying a good starting point going into next year? Can you just walk us through the moving parts and scenarios where you might come in at the bottom end of guidance, 14.5%, and where you'd be at the top end?

I'm

just surprised because at the Investor Day, you guys said 15%-plus.

We decided to stay the ambition is 15%-plus. The ambition is really 15% ROE, high single-digit EPS, top-quartile performance.

The math of that is we need to run the business 15%-plus to deliver that. We went with a 200 basis point guidance range, 14.5% to 16.5%.

We've sort of guided the market pretty quickly to take the midpoint, 15.5%, with the slide there that sort of guides the market quickly there. Never say never in insurance, but you'd have to think that we're more likely towards the top than the bottom would be my thinking.

We've got a 200 basis point range for uncertainty that we have in running the business we have. We've spent a lot of time taking the uncertainty out: reinsurance, other things we've done operationally, the technology transformation.

Sort of stepping it through, then the run rate, we expect to Kieran's point, that we'll see a greater contribution and underlying level from RACQ in FY27 compared to '26. In our commercial businesses, there are challenges, particularly in New Zealand, we're not expecting certainly not in New Zealand, anything stronger, and to hang on is sort of what we're trying to do, and be disciplined is the better word to use probably than hang on.

We're just operating there. We don't have headwind in things like perils allowance and the like too much because we've only increased that by a couple of percent.

You can see what we're doing on perils: we're leaving that $100 million outside of guidance, we're purposely doing that, where our guidance is our perils allowance, which is the attachment of our layer. Actually, the modeling says, on average, there should be upside on that, and we're leaving that outside of those guidance numbers purposely to make it simpler, hopefully, for investors.

My overall tone for this release is the business is going pretty well. We're trying to get that balance right of 5% to 8% growth, which is pretty ambitious for IAG, but we've got some real evidence why that we're going to deliver that, as well as maintain those margins in the guidance range that we've set out.

That's really helpful. Thank you.

Then just on the New Zealand margin, just drilling into the retail versus commercial as well, would you expect retail margins to continue to moderate because pricing's been so good in that market? Then secondly, on commercial, is 10% margin sort of you earning your cost of capital there?

Is that your target, or would you expect that to go higher, just to be more disciplined?

The New Zealand market is similar to Australia. The retail and the issues affecting NZI are really quite different in the retail.

There's not a similar comments to what happens in Australia between Australian retail and our CGU business. Just some of the challenges in NZI not necessarily impacting the retail business, the AMI and the State brands.

No, no, that business continues to do very well. Margins are strong.

There's something in New Zealand which is a bit unusual, that every year you don't have an earthquake, that there's sort of an element of that pricing and profitability that sits there, sort of there are higher returns because of that. No, that business is going very well.

It's got genuine growth happening, and I expect those margins to stay roughly where they are. As I said, with NZI, that's a different story.

That's about maintaining the discipline, holding that position. As I said, if we could be flat in '27, that would be a great outcome, and I'm thinking maybe minus a little bit, but definitely not minus 10.

That's in relation to growth.

Right, it's green. Following up on one of the quotes from your annual report on page 83 in directors' report, you mentioned that home non-perils claims inflation of around 15% was due to increasing severity of water claims, including impact of changes in building repair standards.

Could I get you to maybe elaborate on that and what else you're seeing around claims inflation?

Maybe some themes, and I will bring William in. He's been sitting there quietly.

The themes on inflation are motor a much better story. We're really seeing quite a drop, and I think that's been helpful, obviously helpful for consumers, but in our go-to-market strategy, we sort of feel like that's been helpful to us.

Property, we continue to see property inflationary challenges, and that's not really driven by the industry; it's driven by the challenges of our country on repair costs, access to labor, building materials. There's just inflationary pressure in the system.

That's right. We definitely have greater incidence of water damage, and then the standard to which we were repairing some of that, particularly anything to do with mold, has increased, and that's not just an IAG comment; that's an industry comment.

Then sort of throw in just generally, we're seeing more perils and more events, we expect over time greater frequency of perils events, therefore adding to the challenge here. It's really the combination of those things that are driving that.

Then

on your expense ratio, are we likely to see it lower in the second half of the year as you switch legacy systems off, or should we expect to be sort of stable through the year?

You can see that we are gradually bearing down on the expense ratio, and a bit like this year, you had 11 11.5 in the second half, 11.7 in the first half. We expect a continued downward trend.

What's really important within that is that the cost to maintain, if you look at the sort of the shaded bars in the build-up, is coming down faster, and we're giving ourselves space to continue investing in AI, in technology. There's a little bit of amortization also coming through, obviously, from all the great work we have already done.

We're giving ourselves space for that, and the non-labor technology costs, we're actually allowing for that to increase at a double-digit rate, while bearing down on the whole thing. We invest well for the future.

Good morning. Andrei Stadnik from Royal Bank of Canada.

Can I ask my first question around the top-line premium guidance? Between 5% and 8%, I think that's well ahead of what the market is looking for.

I think the market's just below 4%. Can you step us through what is going to be driving that?

That's quite a punchy number.

Yeah. There's a few parts.

That's part of the reason we showed the quarterly direct retail businesses in Australia and New Zealand, because you can see the evidence of why we're confident. The elements are: there's probably 1 and a bit 1 1 and a bit percent from RACQ, last year in '26 we only had 10 months, in '27 we got 12 months, just that is so they can sort of bank that.

The run rate of our direct retail businesses, we sort of said in there mid-single digits for retail in total, but the direct element of that, which is the biggest part, remember, our retail businesses are gigantic part of the premium pool, the run rate which was on those slides was sort of 7%. The banks are slightly softer than that in both Australia and New Zealand.

Both of them are not growing as fast as our direct businesses, but they're still positive expect. That's sort of there's 1% from that.

That's sort of mid-single digit with our direct retail AMI State, NRMA, RACV, more like 6 7. Then within sort of Jared's CGU and Phil's NZI, whilst I've said low single digits, but actually behind that, the commentary I made was we'll probably do slightly better than that in CGU in Australia, and if we can do zero in NZI, I think we'd be very pleased, and probably minus 1 minus 2, something in that order.

Then you've got to add the materiality of that to the numbers. That's the rough outline of our growth for FY27.

For my second question, just following up on the cost side, you mentioned you making about $400 million of AI and technology modernization investments for '27. That's in an admin cost base for the group of about $1.4 billion, so that's quite a meaningful improvement.

Can you talk a little bit about how is that going partly through CapEx line and also what kind of improvements you're expecting? Because yeah, that's quite a big, deliberate investment you're making.

Just a comment from me before I throw to William is that's roughly what we've been spending, so that's not new. That sort of run rate of IAG, we've been able to manage that, and it doesn't just appear in the admin, it's sort of in claims handling, it's claims systems, this is a few other buckets.

We don't feel like that's a sort of a surge, call it that, but that we're used to the run rate of absorbing that, and that I think we're really starting to see the benefits of

that. That's exactly right.

The level of capitalized asset will be fairly stable. We do capitalize some of what we invest each year, and we also expense quite a chunk in-year, and you then get some amortization.

It's relatively stable. As I mentioned, obviously we're giving ourselves the capacity to continue investing at a strong level in that because we're bearing down on the underlying just costs to run the business.

Thank you.

Thanks, mate. I think Mark's telling me to go to the phones or the video.

Good morning, guys. Thanks so much for taking our questions.

Just the first one, I'm trying to work out where we can see the benefit of the reinsurance synergies, the $50 million, within the non-quota share reinsurance costs. Seems to be broadly flat half on half.

Also, just a second question on that is what's your expectation here for this into FY27 given some of the drop-off in those reinsurance reinstatement costs? Thanks.

Thank you, Julian. The part of it, in fact, the larger part of it, was the benefit of bringing RACQI onto the group's whole-of-account quota share, which is better terms than the quota share that RACQI had beforehand.

That's where quite a bit of the benefit is. Then there's also just better pricing on a number of the other peril and non-peril covers that we have.

Sure. Should we expect the non-quota share reinsurance costs to reduce next year?

Is that just given the drop-off of some of these one-off costs?

I think it'll be fairly stable. We are continuing to buy some drop-down cover on perils in addition to the quota share for the RACQI business.

The next big renewal date will be 1 January, we just sort of wait and see. There can be other factors that happen.

It's a bit hard to predict sort of out, when we've got some other global factors that may or may not be impactful over the next few months.

Julian, I can take it offline with you later. There's how some of the items come through the claims line as well on the commissions.

Sure. Got it.

Then maybe just a second question for Jared. Just be interested to understand thoughts where we're at today in terms of margin ROE for the intermediated business and just around a reinsurance opportunity.

I know it was something that was seeming to be quite imminent. Just understanding where that's at and what's the timeline and what's the catalyst for getting that done.

Thanks.

Maybe I'll comment on the reinsurance opportunity. Something that Jared and I had worked on.

Yes, we have explored whether we could bring in some reinsurance behind the commercial business. We continue to think it would be a good idea.

We set ourselves some financial hurdles for that. We haven't quite met those yet, we haven't yet executed something on that, but it's something we will just continue to explore.

If it meets our targets, we'll do it, but we'll stay disciplined on our targets.

Just a comment from me then on sort of ROEs and returns in commercial businesses generally. There's definitely around the world, we're in a softer cycle, which returns are still relatively strong, but outlook is tougher.

I think there's some real uniqueness around our CGU business and WFI business in Australia that's not quite that. Because remember there's a big chunk of that business is WFI, which is a rural agency business that really doesn't have some of the similarities to global commercial businesses at all.

It's more retail like. That's a big chunk of the business.

We've also got personal lines in there that's not like that. We've also got, even compared to say our NZI business, proportionally smaller, proportionally, into that sort of SME smaller commercial markets.

That's why we continue to deliver really strong returns in that business. There's definitely pressure in our intermediated business here in Australia, but we've been extremely disciplined, and we would expect to continue to earn the sort of return profile we're currently delivering despite the softer market over the next couple of years.

Actually, we're doubling down on investment. We're accelerating our program into that business.

It'll be really more match fit when I think there'll be more opportunities for growth, as the market sort of changes in its cycle.

Then just to follow up, William, in terms of the financial hurdles, just want to understand that a little bit better that you're hoping to achieve.

For that business or just generally?

In terms of the reinsurance strategy, you mentioned that you weren't getting the financial hurdles across the line to make it work.

Yeah. Exactly.

Clearly we'd expect capital relief, and it improves the sort of volatility and distribution of our earnings, and we'd want something to be at least ROE neutral, if not ROE positive.

Okay. That's proving difficult to achieve in the current market for reinsurance?

I won't go into detail, but there has been investor interest, we just haven't quite met the hurdle yet.

Just a comment from me is we're always looking to diversify our reinsurance. We could easily write a mainstream quota share into our intermediated business tomorrow, easily, if we chose to.

What we're also trying to do is ensure that we've got different structures, different funding mix sort of in a sophisticated way so that we have multiple sources of capital to fund our company and not overly reliant on one form or one counterparty. That's kind of why we went down this path a little bit.

Actually, we could do something easily with a more traditional form. We're purposely not, is kind of our thinking.

You should expect, we probably made at the time too big a thing of this Lloyd's syndicate, actually, we're always looking at different ideas about different ways of funding the company, and that was just an example, but we've got other ideas, too.

Got it. Just the last question for me, profit commissions this half.

I couldn't see that anywhere, but where was it stable versus first half, just to be very clear, both the quota share and the aggregate stop-loss?

Yes, broadly stable, and we also expect it to be a similar level into FY27.

Great. Thanks so much for that, guys.

Much appreciated.

Morning, everybody. Just a few questions.

Firstly, just I I just wanted to ask about rate versus inflation and the outcomes we're seeing in RIA margins in Australia. I think when I go through your commentary, it seems like home inflation is extraordinarily high.

I think you've flagged 15% at the moment. Just just wanted to and I think it doesn't feel like rate is covering that.

I think you're you're flagging high single digit. I know there's could be some benefits from the cap reinsurance, but it still seems to be there seems to be a gap there.

Motor seems like, you're flagging low single digit for both rate and and inflation, so that seems okay. Half on half, ex-RACQ, you do seem to have had significant margin improvement in RIA.

I sort of wanted firstly to understand two things: inflation, just in home, is that, just is that is that likely to continue, and what are you going to put through in rate going forward? Secondly, if it if it if it doesn't look like, the improvement in margin came from short tail, was it long tail that that led to the improvement in in RIA margins?

Hey, Sid. Hi, mate.

I'll make some comments, and then, William, you come in, too. As a principle across the company right now, there's nowhere that we're not putting rate through in line with inflationary costs, we've got some challenges probably in NZI, I'm sort of assessing that risk.

It's not really inflationary costs that's the problem; it's sort of a competitive environment. Depark NZI, that's not the approach anywhere.

To your point in sort of yeah, yeah, we have some examples of that 15% within some examples of it in our property classes within Australia, but that's I don't think we can generalize to say that that's causing us to put pressure on our margins. That's not right.

William, you speak to that.

I can do. Yeah.

Unpack a little bit. If you said we can go into this more later, but within the 15 the 15% is actually an average claim size inflation number, there's a little bit of mix in there.

Then, but also, that's about non-peril claims. We have perils where, obviously, that's a much more stable position, and our overall peril allowance is only up 2% into next year.

There's an admin cost component also that all of these things feed through into rate. Of course, admin costs we're bearing down on.

When you take all of those things together, don't forget the non-peril claims is actually only a minority of the cost of a home policy. When you put all of those things together, that's how you get to the high single digit.

Sorry, just the last part of that question was just the margin improvement that we saw half on half underlying in RIA ex-RACQ?

Sorry, I didn't hear the first part of the question.

Just the half on half. Oh, sorry.

The margin improvement that was there in sequentially first half to second half on RIA ex-RACQ, was that driven by long tail?

No, not

CTP, CTP?

No. Not by CTP, but obviously, we're just gradually getting benefits from all of those substantial claims actions, expense actions, and other things coming through.

Right, okay.

Yes.

Hey, Sid. We're

on top of any inflationary pressure, that we are pricing as we're seeing it. I don't feel like that's the case.

CTP is relatively flat, I don't think that's a driver. This is a gradual improvement where, at the same time, we're growing the company, we're getting some expense ratio relief as part of that.

We've got some reinsurance benefits that are sort of being helpful, too. It's sort of a combination of a few things is that we've got the machine sort of running well.

That's how it feels.

Yep. Thank you.

I just want to follow up on the profit commission component. If the second half is in line with the first half, I think that suggests that you're tracking at a little bit over 2% of NEP as the contribution from profit commissions.

I think previously you had guided to 100 to 200 basis points from the quota share. Just wanted to understand, and just in terms of messaging, I'm always just a little bit unclear exactly where the messaging is around profit commissions, because on one hand, what you're running through at the moment seems to be higher than the guidance you'd given before, but you're also flagging upside further down the track.

I'm just a little bit confused by messaging around this. I'm hoping you could clarify once and for all: are we tracking above the long-term guidance at the moment?

Where is the potential upside? Maybe if you just clarify it for me.

No, I'm happy to clarify. Look, we are in that 100 to 200 range.

We're not above that range, and we continue to book it conservatively, and so the trend over time should be an increasing profile, and that is the answer.

Cuz I calculate a number over 200 basis points if the number was consistent with the first half. It's not.

It's not over 200 basis points, not at all.

Okay.

Again, I'm happy to dig into that further with you later.

Yep, no worries. Thank you.

Thanks.

good morning, everyone. I'd like to sort of focus back on unit growth in Australian retail, if we could, and taking on board, Nick, what you've said about increasing momentum, particularly in New South Wales in motor units.

Presumably, if you look on a national basis, you're probably still not growing quite in line with system, firstly. Is that correct?

Secondly, do you think that the strength of the momentum that you have in that space will sort of lead you to be at least being able to grow in line with system moving forward?

Hi, Nigel. I feel like you answered the question, by the way.

I would say in the 12-month period, we've grown volume and probably held or maybe even slightly grown market share in home. In motor, we definitely had a tough first 6 months.

We're back a lot more positive, as you can tell, in the second 6 months. If I look at that entire period, say, we may be at or maybe slightly below system for the whole country.

I feel like we've got some momentum to take that forward. In relation to sort of aspiration, call it that, yeah, we want to be able to hold our own in both those parts of the business going forward, at least.

Obviously you sort of suggesting that system growth in home is around about 1%, maybe just slightly higher than Suncorp seem to be indicating yesterday. That obviously is still pretty subdued.

What's your sort of feeling as to why that growth is quite subdued at a system level?

There's a whole lot to unpack under that, isn't there? That's population growth, new builds, apartment living, the way we live.

I think that the sort of building stock that it sounds like Suncorp said something similar. That's sort of roughly what we see across that market, probably for the next year or two.

Okay. You think it's a pretty ongoing level of system growth unlikely to change in the near term?

Yeah. Are you thinking upside or downside on that, sorry?

I would have thought that's relatively modest.

It doesn't sound great, but it's just obviously it seems to be where it's at, right?

Yeah.

Yeah. All right.

In that kind of environment, how do you get 8% growth at the top of your target range? What would that require?

Oh, it's NZI doing slightly better, it's see what the pricing for property, it's slightly better in motor, probably. I think it's at the margins in a few different places would be what I'd say.

Right. Sounds a bit unlikely, but you think it's a realistic

That's why we showed you the quarter on quarter. That's quite a positive slide, that quarter on quarter on quarter on quarter, what we're delivering on our direct retail businesses, which is 60% of our company.

We've got a range there. We've got a range for a reason, and I'm not guiding everyone to the top of the range, but I can see a scenario where that's delivered.

I'm not saying that's where I want you to go. That'd be my commentary.

Fair enough. Then maybe just also just on the reinsurance, obviously it's covered a little bit on that already, but obviously now you are sort of there with the quota share at 35%.

Is this the long term now? Is the 35% where you feel you'll be for a while or

Hey, Nigel, we're not looking to make any changes to that. Never say never, but it's not on the agenda at the moment.

Let's leave it at that.

All right. Thank you.

I know it's a busy day for everyone. Hey, thanks, everyone, for participating, those in the room and those that have participated online.

The key message we want to leave you with is we've sort of got this. We've invested heavily.

Technology platforms are really starting to deliver. We're getting some productivity efficiency, we're getting great customer metrics in our retail businesses.

We talked about a lot today around genuine momentum in our direct retail businesses with our flagship brands really creating growth. We see that as a pretty exciting opportunity for us over the next couple of years.

Profits and margins are strong, and we really see outlook very positive. That's sort of the message that we want to leave you with today.

Thanks again for being here, and enjoy the rest of your day.