IAG share price drops 13 in a year: Buying opportunity or time to sell up?

The Insurance Australia Group Ltd (ASX: IAG) share price is trading in the red again on Tuesday morning. At the time of writing, the shares are down 0.13% to $7.52 a piece.

Today’s decline means the IAG share price is now down 5.88% for the year-to-date and represents a 13.06% drop over the past year.

What happened to the IAG share price lower?

The IAG share price has been relatively volatile over the past 12 months, fluctuating anywhere between $7.10 a piece to $9.21 a piece. 

The shares crashed 15% in a week in February last year after investors were unhappy with its FY25 half-year result. 

The shares reached an annual low of $7.31 a piece in early April before climbing just over 20% to end the financial year at around $9 per share. 

The insurance company’s share price tumbled constantly throughout the final quarter of the 2025 calendar year after IAG provided FY26 guidance for GWP growth of “low-to-mid single digit”.

In 2026 so far the shares have tumbled even further after extreme weather conditions across the country. Recent weather events, such as bushfires and widespread flooding, raises concerns about the number of insurance claims and reinsurance costs. Investor concerns about what this might mean for the business has likely contributed to the pullback in the share price.

Buying opportunity or time to sell up?

While the IAG share price has tumbled recently, there has also been some positive news out of the business. 

Earlier this month, the insurance company announced that it has successfully integrated its RACQ Insurance (RACQI) business into its main catastrophe cover.

IAG also announced that it has expanded its WAQS arrangements to cover 35% of the consolidated business. The company has maintained RACQI’s separate standalone reinsurance program that comprised quota share and catastrophe protections.

IAG’s total 2026 catastrophe reinsurance program provides a main catastrophe cover for two events up to $10 billion, with an attachment at $500 million.

UBS recently said it predicts that the business could generate $1 billion of net profit in FY26.

The broker has a buy rating on IAG shares with a price target of $9.10. This implies a potential 21.01% upside for investors over the next 12 months, at the time of writing.

Some brokers are even more bullish. TradingView data shows that 7 out of 11 analysts have a buy or strong buy rating on the shares. The maximum target price is $9.90, which implies the shares could jump another 31.47% from the share price at the time of writing. 

There is no crystal ball to show exactly what will happen with the IAG share price. But with potential upsides as high as those noted above, the current price point could present a great opportunity for investors to get into the stock before it starts climbing again.

The post IAG share price drops 13 in a year: Buying opportunity or time to sell up? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.