Insurance Australia Group and Suncorp: Successful Repricing Lowers Midcycle Earnings Uncertainty

Australia's largest general insurers are currently in a sweet spot: Higher interest rates are boosting investment income, and material premium rate increases are improving underwriting profitability. Breaking from what had become the norm, natural peril events are not exceeding expectations either. These tailwinds are well recognized by the market, with shares in Insurance Australia Group and Suncorp up 19% and 22%, respectively, beating the 8% return of the Morningstar Australia Index over the last 12 months.