MM went long IAG last week and its felt ok even as the rain rolls across NSW, investors should remember insurance businesses re-insure and make provisions for such natural disasters, albeit within reason. Unfortunately for the consumer higher premiums are probably inevitable which are good for insurance margins. The way IAG has absorbed the pending flood damage claims suggests to me its great value at current levels, remember “sell strength & buy weakness in 2021”. We continue to like IAG here and feel the risk / reward is very compelling at current levels, particularly for income conscious investors with the expected yield of 5.47%.
MM remains bullish IAG.
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