Whee is IAG heading which many of you I am sure are very...

Whee is IAG heading which many of you I am sure are very interested to know. I was discussing on the weekend with a Insurance broker and these are some of the things we discussed. Well here are my catalyts:
1. Insurance premiums have been rising across the industry to cover for the lack lustre yields from bonds. Once insurance companies raise premiums they are not going to discount them back once yields increase. They may on the edges thru competition decrease some pemiums but it won't offset the increases in 2020, 2021 and 2022.
2. All things being equal rates are likely to rise rather than fall in the future. By how much nobody knows but up its almost certain and this will provide further income from bonds to insurers in the long term.
3. Once vaccinations are mainly undertaken for covid (80-90% of the population) lockdowns won't occur which means the ambiguity over business interuption insurance will dissapea for covid anyway. This has been a drain on payouts.
4. Commonwealth selling its general insurance arm to Hollard Group has been a blessing for IAG. If it had gone to major Aussie competitor it could have created a strong competitor in the Australian maket. IAG would have unlikely convinced ACCC to allow it to buy. So without paying for the business IAG will gain some of these customers over time without paying for the business. Hollard has no presence in Australia and will stuggle to compete with IAG.
5. Weather events floods and bushfires. No doubt Australia has had some bad luck lately with these catastrophies and we will likely face more in the future but on statistical averages we are unlikely to face such big payout events in the next few years. We may have bushfires but not to the extent of 2019.
6. Regarding inflation. Yes it may be transitory but a couple of years of 5%+ inflation followed by 1-2% inflation still means everything will have a uptick in price including insurance premiums. They are not going to decline. So whether you think inflation is transitory or not it doesn't matter. Insurance companies will be adjusting premiums to make money.

In terms of headwinds. I see the property market with their shoddy construction. But in short it will improve from here in the long run the only unknown is by how much. Best of luck to holders and DYOR.