break out happened, page-5

Yes, I think that the drivers of the underlying performance of the business, were solid.

Cost control, insurance margin, reduction in reserve release, capital position (despite the recent special dividend, which was greater than the proceeds from the sale of the Thailand business) all get a big tick.

And IAG's New Zealand business is certainly powering ahead, with, at 5.5% GWP growth and 20% insurance margin.

And I think that the 16%-18% insurance margin guidance for the full-year (DH2018 = 16.2%) is impressive, especially when it includes further reduction in reserve release, as well as absorbing $20m of increased regulatory and compliance costs.

My one concern is that we may be approaching the top of the rate cycle in Australia, given the industry Returns on Equity are now probably in the high-teens (IAG will be close to 20% this year).

And, the stock's valuation multiple - now being in excess of 15 times P/E, so probably on par with the broader market - suggests it is certainly not priced for peak cycle earnings.

Which means the market is saying that the insurance cycle will be more enduring and resilient this time.

I dunno so much.... I'm not a real believer in any "this-time-it-will-be -different" philosophy when it comes to financial and economic matters.

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