Insights

The IAG (ASX:IAG) share price is down 10% so far in September. What’s next?

Shares in the Aussie insurer have underperformed in September.
The post The IAG (ASX:IAG) share price is down 10% so far in September. What’s next? appeared first on The Motley Fool Australia. –

The Insurance Australia Group Ltd (ASX: IAG) share price has been under pressure this month. Shares in the Aussie insurer are down 10.8% in the past month to their current $4.80 valuation.

So, what’s driving the company’s share price right now and what lies ahead for shareholders in 2021?

Why the IAG share price is down 10% in September

One recent ASX announcement appears to have triggered the recent share price slide for the Aussie insurer.

On September 6, IAG reported CMC Hospitality had filed an application to start a representative proceeding against the company in the Federal Court of Australia.

While IAG was unsure of the exact details of the proceeding, it noted the application “appears to relate to insureds who hold policies with CGU and business interruption losses related to COVID-19“.

CGU refers to CGU Insurance Limited, an intermediary-based insurance company under the IAG umbrella.

News of the court proceedings hit the IAG share price hard. That downward momentum has continued throughout September and seen the insurer’s shares slump 10% lower.

At the heart of the proceedings is COVID-19-related business losses. As lockdowns continue to roll on across Australia, businesses have been looking to their insurance policies for downside protection.

IAG said it is one of several insurers that will be part of “an industry test case” in the Federal Court. That test case will help determine what insurers must cover in relation to business interruption claims.

For its part, IAG said it will follow the court’s final ruling and resolve claims as quickly as possible once this has been determined.

The IAG share price has continued to slide throughout September. The broad market sell-off in the S&P/ASX 200 Index (ASX: XJO) last week also didn’t help boost the insurer’s value any higher.

What’s next for IAG?

The Federal Court rulings loom as a key factor for the IAG share price in the short term. The court will ultimately play a part in what IAG’s downside exposure is for business interruption claims which, in the era of COVID-19, would likely be significant.

The post The IAG (ASX:IAG) share price is down 10% so far in September. What’s next? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

How has the IAG (ASX:IAG) share price been performing since reporting results?
Why Adbri, AusNet, IAG, & Premier Investments shares are falling

Here’s why ASX 200 insurers are underperforming the market this Wednesday

IAG (ASX:IAG) share price slumps 2% amid earthquake payout concerns
5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Ken Hall 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!