IAG Confirms 19c Dividend with No DRP Discount for FY2025 H1

Dividend Update and Context

Insurance Australia Group Limited (IAG) has provided an update to its dividend announcement for the first half of the 2025 financial year. The company confirmed an ordinary dividend of 19 cents per fully paid ordinary share, relating to the six months ended June 30, 2025. This dividend is 40% franked, reflecting the company's ongoing commitment to returning value to shareholders while managing its tax position.

The dividend will be paid on September 18, 2025, with a record date of August 22, 2025. The ex-dividend date was August 21, 2025, marking the cutoff for shareholders eligible to receive the payment.

Dividend Reinvestment Plan Pricing Details

In this update, IAG included important details about its Dividend Reinvestment Plan (DRP), specifically the Volume Weighted Average Price (VWAP) used to calculate the reinvestment price. The DRP price has been set at AUD 8.6743 per share, based on the VWAP during the pricing period from August 27 to September 9, 2025. Notably, there is no discount applied to the DRP price, which means shareholders participating in the plan will reinvest dividends at the market price without any incentive pricing.

The DRP is structured as a full plan, allowing shareholders to reinvest their entire dividend entitlement into additional shares. However, the default option for shareholders who do not make an election is to receive their dividend in cash. There are no minimum or maximum participation limits, offering flexibility for investors of all sizes.

Implications for Shareholders and Market

This update provides clarity for investors considering their income and reinvestment options. The absence of a discount on the DRP price may influence shareholder participation rates, as some investors seek reinvestment incentives. Meanwhile, the 40% franking credit attached to the dividend enhances its attractiveness for Australian investors seeking tax-effective income.

As IAG continues to navigate a competitive insurance market, maintaining a steady dividend with clear reinvestment terms signals confidence in its financial position. Investors will be watching closely to see how the market responds post-dividend payment and whether uptake of the DRP meets company expectations.