Insurance Australia Group Sets AUD 0.12 Dividend, 60% Franked for H2 2024

Dividend Announcement Overview

Insurance Australia Group Limited (ASX: IAG) has confirmed an ordinary dividend payment of AUD 0.12 per fully paid ordinary share. This dividend relates to the six-month period ending 31 December 2024. The announcement was made on 13 February 2025, setting the ex-dividend date for 18 February and the record date for 19 February 2025. Shareholders can expect payment on 7 March 2025.

Franking Details and Tax Implications

The dividend is partially franked at 60%, meaning AUD 0.072 per share carries franking credits at the corporate tax rate of 30%. The remaining 40% (AUD 0.048 per share) is unfranked, which may have tax implications for investors depending on their individual circumstances. This partial franking reflects IAG's ongoing approach to balancing shareholder returns with corporate tax strategy.

Dividend Reinvestment Plan (DRP) Conditions

IAG continues to offer a Dividend Reinvestment Plan, allowing shareholders to reinvest their dividends into additional shares rather than receiving cash. Notably, the DRP does not include a discount on the reinvestment price, which will be calculated as the volume weighted average price of shares traded on the ASX during the pricing period from 21 to 27 February 2025. Shareholders must elect to participate by 5:00 pm on 20 February 2025; otherwise, dividends will be paid in cash by default.

Context and Market Implications

This dividend announcement signals IAG's steady financial position following the 2024 fiscal year. The partial franking suggests a cautious but confident approach to capital management amid a complex insurance market environment. Investors will be watching closely to see how this dividend fits into IAG’s broader strategy, especially as the company navigates evolving regulatory and economic conditions.

Looking Ahead

With no external approvals required for this dividend, the payout is straightforward and timely. The market will likely interpret this as a reaffirmation of IAG's commitment to delivering shareholder value while maintaining flexibility in its capital allocation. The absence of a DRP discount may also influence shareholder participation rates, potentially impacting share price dynamics in the coming weeks.