What happened to the IAG (ASX:IAG) share price in the FY22 first quarter?

The Insurance Australia Group Ltd (ASX: IAG) share price had a rollercoaster run in the first quarter of this financial year.

Opening at $5.16, shares hit a 52-week high of $5.51 during the 3 months before crashing to $4.92 by the end of the quarter.

There were plenty of stories that could have affected the insurance giant’s share price.

Let’s take a closer look.

What happened to IAG in the first quarter?

The first major story that could have affected the IAG share price in the first quarter of FY22 was the sale of its 49% stake in Malaysian business, AmGeneral Holdings Berhad.

As Motley Fool has previously reported, the deal will see Liberty Insurance Berhad acquire 100% of the shares in AmGeneral, with AmBank then holding a 30% interest in the insurance operations of both Liberty Insurance and AmGeneral. IAG isn’t sticking around, though, and intends to exit its investment in AmGeneral.

The next big story was a major board reshuffle at the company. IAG announced its chair, Elizabeth Bryan, will retire from the company at the annual general meeting (AGM) on 22 October 2021 after 6 years leading the business.

She will be replaced in the role by Tom Pockett. Pockett has been a director of the business since 2015 and chair of the audit committee. He is also chair of both Stockland Corporation Ltd (ASX: SGP) and Autosports Group Ltd (ASX: ASG).

A second director, Duncan Boyle, will also retire from IAG’s board on 22 October 2021. Boyle has served on the board for 5 years, including 3 years as chair of the risk committee.

How did the release of its FY21 results affect the IAG share price?

Despite a 170% jump in cash earnings, the IAG share price fell on the release of its FY21 results.

To recap, IAG posted the following results for the 12 months to 30 June 2021:

• Gross written premium (GWP) increased by 3.8% to $12,135 million;
• Insurance profit up 35.9% to $1,007 million;
• Net loss after tax of $427 million;
• Cash earnings up 170% to $747 million; and
• Full-year dividend doubled to 20 cents per share.

Looking into this financial year, IAG said it is forecasting low single-digit gross written premium (GWP) growth of between 14% and 16%.

Management also noted its FY 2022 guidance aligns with its aspirational goal to achieve a 15% to 17% insurance margin over the medium term. Despite these positive signs, the IAG share price slumped on the news.

IAG share price snapshot

Over the past 12 months, the IAG share price has increased by about 8%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has gained about 20% in that time.

Year-to-date, the company’s shares have also gained around 8% – this is roughly in line with the stock market.

Insurance Australia Group has a market capitalisation of approximately $12 billion.

The post What happened to the IAG (ASX:IAG) share price in the FY22 first quarter? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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