Insurance Australia Group Ltd’s (IAG) share price dropped by 0.94% on Monday (January 31), marking a nine-year low for the insurance giant.
According to a report by The Motley Fool, IAG’s shares plummeted to $4.24 on the final day of January. In total, its share price has dropped by 3.19% since market close on January 24, 2022.
IAG’s shares dropped by 12.58% in 2021 and 0.47% this year to date. In the past month, its shares have dropped by 1.85%, while in the past week, its shares were down by 2.75%.
Despite the recent drop in shares, The Motley Fool report stated that IAG’s shares outperformed the ASX 200 Financials Index’s 1.84%, with many brokers still considering the insurer a worthy investment.
“IAG has a strong position in the Australian and NZ personal lines market but has suffered in recent times from concerns around COVID-19 business interruption losses and concerns on market share losses in personal lines,” JP Morgan said, as reported by The Motley Fool.
However, Motley Fool investing expert Scott Phillips believes otherwise, emphasising that IAG is not included in his top five best stocks for investors to buy right now.
The share price changes so far reflected IAG’s roller-coaster ride to remain resilient in 2021 despite the persistence of COVID-19. The insurer started 2021 on a high. Between market close on February 08 and 11, 2021, its shares soared by 8%, its gross written premiums (GWPs) jumped by 3.8%, and its insurance profit jumped by 33.1% due to a low level of claims.
However, its shares plummeted by nearly 15% between market close on February 11 and March 10 until they crashed on March 09 before being put in a trading halt, possibly due to Greensill Capital’s collapse.
The insurance giant recovered for a while but eventually took a hit, seeing the ING share price drop by nearly 12% between September 06 and 24 last year when CMC Hospitality applied to start Federal court proceedings against the company.
Then, between October 11 and 17 last year, IAG’s share price took another hit following news that the Australian Securities and Investments Commission (ASIC) took the insurer’s subsidiary Insurance Australia Limited to court. Severe storms and hail also impacted its claims costs, pushing down its share price further.
IAG Australia will release its half-year financial results to the market in under two weeks, on February 11, 2022.
