IAG expects to see elevated reserve releases in FY17 of ~5% of NEP, and has
upgraded insurance margin guidance to 13.5-15.5%.
We think IAG is now expensive for a general insurer, trading on 18x FY18 earnings.
Given the current tailwinds, any pullback in price will be moderate and at $6.50 the stock is well supported by a 5% dividend yield.
IAG remains an attractive buy-write.