Insurance Australia Group (IAG) paid $12.4 billion in claims during the 2026 financial year and responded to 109 weather events across Australia and New Zealand, a volume that underlines the natural perils exposure brokers are navigating at every renewal.
The figures, disclosed in IAG’s FY26 annual report and chairman’s AGM address, sit behind a full-year net profit after tax of $1.022 billion, gross written premium (GWP) of $18.4 billion, and an insurance profit of $1.6 billion.
For brokers, the number that warrants close attention is IAG’s net natural perils claim cost: $1.169 billion against an allowance of $1.216 billion. That narrow margin suggests the insurer absorbed this catastrophe season without material reserve strain but leaves little buffer if weather volatility worsens.
The Insurance Council of Australia (ICA) reported that extreme weather events cost the industry $4.8 billion in insured losses across calendar year 2025, with late-season hailstorms in Queensland and New South Wales driving a substantial share. Cyclone Alfred, which struck in March 2026, added approximately $200 million to IAG’s net claims costs alone. The Australian Reinsurance Pool Corporation (ARPC) confirmed that cyclone reinsurance pool claim payments surpassed $1 billion following the event, the largest single-event loss since the pool launched.
Read more: Cyclone Alfred drives record $1.335 billion loss for reinsurance pool
The channel split in IAG’s FY26 result is where the broker story sits. GWP in IAG’s intermediated division grew 1.1% to $4.6 billion, with underlying growth of approximately 2%. By comparison, IAG’s direct consumer division posted GWP of $10.3 billion, up 17.8% on a reported basis. Excluding the RACQ Insurance book acquired in September 2025, underlying direct growth was approximately 4.5%.
Jarrod Hill, CEO of CGU and WFI at IAG, told Insurance Business the growth gap reflects commercial market dynamics rather than a strategic retreat from brokers. “When you think about the commercial insurance space, it’s far more cyclical than the retail space. At times we’re not able to deliver the growth that ideally we’d like, and we’re in one of those phases at the moment,” Hill said.
Hill said IAG had grown its SME and rural business well with brokers, but mid-to-large commercial property was “pretty flat” and the insurer had “gone slightly backwards on our long tail classes where we’ve seen increased competition, particularly in PI.”
The Australian Prudential Regulation Authority’s (APRA) intermediated general insurance statistics show that nearly half of Australia’s general insurance ran through brokers in FY25, so the intermediated channel remains a substantial part of the broader market even as individual insurer growth rates diverge.
Read more: IAG’s broker growth lag is deliberate, not a retreat
IAG has guided for GWP growth of 5% to 8% in FY27 and a reported insurance margin of 14.5% to 16.5%. The FY26 underlying insurance margin came in at 15.0%, with the reported margin at 14.7%.
The gap between those two numbers reflects elevated catastrophe costs compressing reported margins. For brokers, GWP growth guidance at the upper end of that range, combined with steady margin targets, points to rate adequacy holding rather than aggressive softening in catastrophe-exposed lines.
CEO Nick Hawkins told shareholders the early signs for the current financial year are positive. “Based on the results for the first quarter of the financial year, I am pleased to report that the positive momentum we saw through FY26 has continued into FY27. We remain confident in the outlook for the Group and are on track to deliver against our FY27 guidance,” Hawkins said.
IAG has outlined targets under its Ambition 2030 strategy to reach more than 11 million customers and exceed $25 billion in GWP. Hawkins noted that the intermediated business is delivering well in excess of its $250 million insurance profit target, but the question for brokers remains whether IAG’s growth investment will favour direct distribution over intermediated channels.
Chair Tom Pockett told shareholders the insurer’s scale was tested across the year. “We responded to 65 weather events in Australia and 44 in New Zealand. We paid more than $12.4 billion in claims, ensuring our customers and their communities could recover and rebuild with confidence,” Pockett said.
Hawkins also flagged that more than 80% of IAG’s workforce now regularly uses artificial intelligence tools, with applications across claims, fraud detection, and service teams. Whether that investment translates into faster turnaround for intermediated business is a question brokers will be watching heading into the FY27 renewal cycle.
