Insurance Australia Group Ltd (ASX:IAG) Covers Methamphetamine Claims

Insurance Australia Group Ltd (ASX:IAG) Covers Methamphetamine Claims

Insurance Australia Group Ltd (ASX:IAG) Covers Methamphetamine Claims

  • Analysts covering IAG are expecting a 47% increase in earnings in the three year’s time. This would see the EPS rise to $0.37 levels which would no doubt please investors who are used to an average of $0.35 over the past few years.
  • Insurance Australia Group has not kept up with the average growth in earnings of the Insurance industry over the past year.
  • Whilst IAG’s Return on Equity of 9.7% isn’t horrific, it means that the company has underperformed the Insurance industry average of 10.31%. This is expected to slightly improve with analysts expecting ROE in 3 years to be 14.9%
  • IAG says it pays out $14 million methamphetamine claims on residential properties.
  • Ralph Hart, Insurance Australia Group New Zealand’s personal lines underwriting solutions manager, said most claims in tenanted properties were for meth use.
  • “IAG meth claims tally about $14m per year, with claim numbers varying from 40 to 80 each month,” he said of all types of residential properties.

Insurance Australia Group Limited is engaged in the underwriting of general insurance and related corporate services and investing activities. The Company’s segments include Consumer division (Australia), which provides general insurance products to individuals and families throughout Australia; Business division (Australia), which provides commercial insurance to businesses of all sizes throughout Australia under CGU, WFI and Swann Insurance brands; New Zealand, which provides general insurance business underwritten in New Zealand; Asia, which provides direct and intermediated insurance business underwritten through subsidiaries in Thailand, Vietnam and Indonesia, and Corporate and other, which comprises other activities, including corporate services, capital management activity and others. The consumer insurance products are sold under the brands, including NRMA Insurance, SGIO, SGIC and CGU. The Consumer division also includes travel insurance, life insurance and funeral products.

Overall, the bias in prices is: Upwards.

Short term: Prices are stalling.

Intermediate term: Prices are trending.

The projected upper bound is: 6.55.

The projected lower bound is: 6.23.

The projected closing price is: 6.39.

INSURANCE AUSTRA closed down -0.070 at 6.380. Volume was 22% below average (neutral) and Bollinger Bands were 7% narrower than normal.

Open     High     Low       Close      Volume
6.440    6.450    6.350    6.380    4,547,552

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period    200-period
Close:                      6.33               6.19               5.85
Volatility:               19                   17                   21
Volume:                  4,333,202    5,200,742    5,669,084

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary
INSURANCE AUSTRA is currently 9.1% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of IAG.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on IAG.AX and have had this outlook for the last 4 periods.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 70.0000. This is not an overbought or oversold reading. The last signal was a buy 11 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.19. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 16 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 94. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.

The following two tabs change content below.

John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

Latest posts by John Heffernan (see all)

You must be logged in to post comments :  
CONNECT WITH