#1This release has been authorised by the IAG Board Financial results Full year ended 30 June 2022 12 August 2022 FY22 Results B iag Nick Hawkins Managing Director and Chief Executive Officer Michelle McPherson Chief Financial Officer#2Important information This report contains general information current as at 12 August 2022 and is not a recommendation or advice in relation to any product or service offered by Insurance Australia Group Limited (IAG) or its subsidiaries. It presents financial information on both a statutory basis (prepared in accordance with Australian Accounting Standards which comply with International Financial Reporting Standards (IFRS)) and non-IFRS basis. This report is not an invitation, solicitation, recommendation or offer to buy, issue or sell securities or other financial products in any jurisdiction. The report should not be relied upon as advice as it does not take into account the financial situation, investment objectives or particular needs of any person. The report should be read in conjunction with IAG's other periodic and continuous disclosure announcements filed with the Australian Securities Exchange (available at www.iag.com.au) and investors should consult with their own professional advisers. No representation or warranty, express or implied, is made as to the accuracy, adequacy, completeness or reliability of any statements (including forward-looking statements or forecasts), estimates or opinions, or the accuracy or reliability of the assumptions on which they are based. Any forward-looking statements, opinions and estimates in this report are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. This includes statements regarding IAG's targets, goals, ambitions, intent, belief, objectives and current expectations regarding IAG's business, results, financial condition, capital adequacy, risk management practices and market conditions. Forward-looking statements may generally be identified by the use of words such as "should", "would", "could", "will", "may", "expect", "intend", "plan", "forecast", "aim", "anticipate", "believe", "outlook", "estimate", "project", "target", "goal", "ambition", "continue", "guidance" or other similar words. While IAG believes the forward-looking statements to be reasonable, such statements involve risks (both known and unknown) and assumptions, many of which are beyond IAG's control ([including disruptions stemming from outbreaks of COVID-19 and global economic uncertainties]). This may cause actual results, outcomes, conditions or circumstances to differ from those expressed, anticipated or implied in such statements. In addition, there are particular risks and uncertainties associated with implementation of IAG's strategy and related targets and goals. As the targets and goals span a number of years, they are subject to assumptions and dependencies which have greater levels of uncertainty than guidance given for FY23. IAG's ability to execute its strategy and realise its targets and goals will depend upon its ability to respond and adjust its business plans (as and when developed) to any changes in such assumptions and dependencies, including disruptions or events that are beyond IAG's control. Neither IAG, nor any other person, gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this report will actually occur and undue reliance should not be placed upon such statements. IAG assumes no obligation to update such information (except as required by law). Past performance is no guarantee or indication of future performance. To the maximum extent permitted by law, IAG and its subsidiaries and each of its and their respective directors, officers, employees, agents and advisers disclaim all liability and responsibility for any direct or indirect loss, costs or damage which may be suffered by any recipient through use of or reliance on anything contained in, implied by or omitted from this report. References to currency are to Australian dollars, unless otherwise specified. Prevailing exchange rates have been used to convert local currency amounts into Australian dollars, where appropriate. Further information, including IAG's business structure, portfolio and partnerships is available on IAG's website at https://www.iag.com.au/about-us/what-we-do 2 FY22 Results | 12 August 2022 iag#33 FY22 Results | 12 August 2022 Overview Nick Hawkins Managing Director and Chief Executive Officer iag#4FY22 results overview $ GWP $13.3bn Strong rate increases and customer growth Underlying margin 14.6% Positive underlying margin momentum Reported margin 7.4% Impacted by natural perils, reserve strengthening and investment markets Net profit after tax $347m CET1 ratio 0.97x Within target range, and additional pro-forma 6pts from Malaysian sale FY23 guidance Strong momentum GWP growth 'mid-to-high single digit', reported margin 14-16% 4 FY22 Results | 12 August 2022 iag#54.4% 0.6% FY22 group highlights strong GWP trends. and steady underlying margin performance GWP growth Insurance margin¹ 14.4% 7.4% 13.8% 1.7% 5.7% 3.8% FY21 FY22 13.5% FY21 Reported margin 7.4% FY22 →Adjusted underlying margin iag Estimated COVID-19, ESL, FX and IAL exit impacts 5 FY22 Results | 12 August 2022 (1)IAG defines its underlying insurance margin as the reported insurance margin adjusted for net natural peril claim costs less the related allowance; prior period reserve releases or strengthening and credit spread movements. The adjusted underlying margin also excludes COVID-19 and discount rate timing impacts. A reconciliation is contained in Appendix 2.#6Divisional highlights • Direct Insurance Australia (DIA) ~100k additional customers in direct brands Pricing for claims inflation, higher peril allowance and reinsurance costs (GWP growth ex-ESL: motor 6.4%, home 8.6%) Improvement on already strong motor and home retention GWP growth/ underlying margin¹ Intermediated Insurance Australia (IIA) ~9% premium rate increases IAL exit (FY22: GWP ~$140m impact) with benefits to flow through in FY23 Current year impact from strengthened commercial liability assumptions GWP growth / underlying margin¹ New Zealand Positive GWP momentum NZ$ GWP growth of 7.0% Disciplined cost management Stable underlying margin performance GWP growth/ underlying margin¹ 23.2% 21.8% 19.8% 19.2% 4.8% 3.9% 3.3% 8.9% 5.8% 5.7% 5.5% 5.0% 5.1% 3.8% 3.9% 3.2% 18.6% 16.8% 16.8% 7.1% 8.1% 14.3% 8.3% 5.9% 2.8% 2.7% 1.5% 0.3% 1H21 2H21 1H22 2H22 1H21 GWP Growth Underlying margin 2H21 GWP Growth 1H22 2H22 1H21 2H21 1H22 2H22 Underlying margin A$ GWP growth NZ$ GWP growth Underlying margin 6 FY22 Results 12 August 2022 (1) IAG defines its underlying insurance margin as the reported insurance margin adjusted for net natural peril claim costs less the related allowance; prior period reserve releases or strengthening and credit spread movements. iag#7Delivering our strategy execution phase on track Grow with our customers FY22 Progress ~100k additional customers in DIA with national¹ launch of NRMA Positioned NZ for direct brand growth through marketing, pricing and product initiatives FY23 Focus • Target under-represented areas using pricing and product capability Redesign digital sales experience to increase conversion Innovate SME Direct product across Australia and NZ Build better businesses Established IIA Underwriting Office and centralised pricing teams Expanded Motorserve (AU) and Repairhub (AU/NZ) Acquired First Rescue, enabling NZ 24/7 roadside assistance • Implement IIA portfolio optimisation plans Deploy updated pricing tools and harmonise product offerings Continue expansion of Motorserve (AU) and Repairhub (AU/NZ), Consolidate and leverage NZ First Rescue ESG commitments including net zero by 2050 Create value through digital Manage our risks 1. 7 FY22 Results 12 August 2022 • • • • . Enterprise Platform rollout more than half-way complete in DIA Online claims tracker for NRMA motor Insurance customers Enhanced SME digital solutions and product offerings • • Single Claims, Pricing and Policy engines in Eastern States and NZ Claims modernisation focussed on digital, automation and Al Continue investment in broker connectivity and automation Improved risk management maturity with strengthened controls and clear executive accountability Integrated Risk Management system implemented Strengthened underwriting capability and governance Renewed quota-share arrangements Continue to uplift risk maturity and embed risk culture • Renew long-term quota share arrangements Excluding Victoria where RACV distributes Direct Personal Lines products on behalf of Insurance Manufacturers Association. iag#88 FY22 Results | 12 August 2022 Financials Michelle McPherson Chief Financial Officer iag#9Financial summary 9 FY21 FY22 Change GWP ($m) 12,602 13,317 5.7% NEP ($m) 7,473 7,909 5.8% Insurance profit¹ ($m) 1,007 586 41.8% Underlying insurance margin² (%) 14.7 14.6 10bps Reported insurance margin (%) 13.5 7.4 610bps Net (loss)/profit after tax ($m) (427) 347 nm Cash earnings ($m) 747 213 71.5% Dividend (cps) 20.0 11.0 45% CET1 multiple 1.06 0.97 9pts nm not meaningful 'The FY22 reported insurance profit in this document is presented on a management reported (non-IFRS) basis which is not directly comparable to the equivalent statutory (IFRS) figure in IAG's FY22 Financial Report (Appendix 4E). A reconciliation between the two is provided on page 11 of the FY22 Investor Report and on page 8 of the Financial Report to comply with the Australian Securities and Investments Commission's Regulatory Guide 230. IAG's FY22 net profit after tax is the same in this document and in the Financial Report. 2IAG defines its underlying insurance margin as the reported insurance margin adjusted for net natural peril claim costs less the related allowance; prior period reserve releases or strengthening and credit spread movements. FY22 Results 12 August 2022 iag#10Strong premium momentum retention continuing to increase Group GWP growth 0.4% -0.2% 7.4% 1.2% 0.3% 5.7% FY22 Reported COVID-19 impact GWP growth IAL personal lines Lower ESL FX FY22 Underlying GWP growth 10 FY22 Results 12 August 2022 B Q Strong rate rises to counter inflation, perils allowance, reinsurance costs & underperforming lines >1% volume growth across direct short tail personal lines in Australia Adjusting for COVID-19, ESL and IAL exit, underlying GWP growth of 7.4% iag#11Stable underlying margin trends pricing for claims inflation Underlying margin 14.7% -0.1% -1.4% 1.9% -0.5% 14.6% Underlying margin ex. COVID-19 and discount rate timing impact 14.8% 14.0% FY21 Underlying margin Lower COVID-19 benefit Increased perils allowance Discount rate timing impact Net improvement FY22 Underlying margin 1H22 2H22 iag 11 FY22 Results | 12 August 2022#12Stable underlying claims trend managing inflationary pressures ~2.0% COVID benefit 52.8% 1H21 12 FY22 Results 12 August 2022 אן Premium rate increases earn through Group adjusted underlying claims ratio 00 Reduced motor claims frequency during COVID lockdowns Increasing inflationary pressures $ impacting average claims costs 54.5% ~2.0% COVID I benefit 54.5% IN Liability deterioration in 2H22 52.0% S 2H21 1H22 2H22 Lower large loss experience in IIA, higher large commercial claims in NZ iag#13Managing expense trade-offs to constrain operating cost growth 13 $2,503m Gross operating costs $1,303m -5.8% $1,228m Costs to transform $315m $239m +31.8% $2,531m FY21 FY21 1H22 2H22 FY22 FY22 Results 12 August 2022 FY22 Costs to maintain $2,264m $2,216m -2.1% FY22 FY21 iag#14Catastrophe reinsurance protection with increased perils allowance to $909m in FY23 $1,119m FY22 net perils $350m FY23 aggregate cover (gross basis) $100m $m 10,000 500 Gross catastrophe reinsurance Main Catastrophe Program $354m above allowance FY23 drop-down cover 250 (gross basis) 200 CY22 Drop-down Cover* ($50m xs $200m) FY23 Drop-down Cover ($100m xs $150m) 150 MER of 50 $135m 0 Event 1st at 1 Jul 2022 14 FY22 Results 12 August 2022 2nd 3rd 4th *Cover depicted with aggregate erosion as at 30 June 2022 FY23 Aggregate Cover ($350m xs $500m) iag#15Reserve strengthening, actions to mitigate future impacts Prior period reserve movements ($m) 36 19 19 -20 -1 -34 -17 -85 -89 -134 IIA prior period strengthening 2H22 strengthening driven by commercial liability due to: Late reported medium to large claims, notably worker injury claims in 2017 and 2018 accident years High levels of claims inflation Strengthening of silicosis exposures Addressing the issue Recent observed experience and trends in 2017 and 2018 accident years has been extrapolated into more recent accident years Pricing and underwriting adjustments to mitigate future impacts Strengthened reserving does not assume any benefit from pricing and underwriting adjustments in recent years 2H20 1H21 2H21 1H22 2H22 Other divisions ΠΙΑ 15 FY22 Results | 12 August 2022 iag#16Investments timing impact from transition to higher yields Technical reserves market impacts 2.4% 1.2% 1.3% 1.1% 51 26 18 (14) (63) (28) 1H21 2H21 1H22 2H22 Credit spread impact ($m) Discount rate Investment yield timing impact ($m) 16 FY22 Results 12 August 2022 ~$12bn Investment Portfolio ~$7.7bn technical reserves invested in fixed interest & cash - Loss of $238m Driven by risk-free rate movements and widening credit spreads ~$4.1bn shareholders funds - Loss of $105m Impacted by risk-free rate movements and lower equity markets Small loss from alternatives portfolio iag#17Solid capital position near mid-point of targeted range Positive impact from partial release of Bl provision Higher insurance concentration risk charge, lower asset risk charge AmGeneral sale completed July 2022 17 FY22 Results | 12 August 2022 1.02 Movement in CET1 ratio 0.07 (0.06) (0.05) 0.01 (0.01) (0.01) 0.97 (0.05) 0.06 0.98 Dec-21 2H22 Earnings FY22 interim dividend Increase in capitalised costs Increase in Decrease in DTA excess tech Decrease in I Jun-22 I capital charges FY22 final dividend AmGeneral sale Jun-22 Proforma iag#1818 FY22 Results | 12 August 2022 Guidance & Value Proposition Nick Hawkins Managing Director and Chief Executive Officer iag#19GWP growth and reported margin guidance demonstrate strong business momentum Features of FY23 guidance GWP 'Mid-to-high single digit growth'¹ for the full year Reported margin FY22 underlying margin Discount rate timing impact (Negative impact in FY22) COVID-19 impact (~$55-65m benefit in FY22) FY22 adjusted underlying margin Net FY23 improvement o Higher investment yields Margin impact 14.6% ~50bps (~70bps) 14.4% ~140bps - 340bps o Earn through of rate increases, notably in IIA o Higher claims inflation and reinsurance costs Increased natural perils allowance ($144m increase in net allowance to $909m) FY23 reported margin guidance (1) Refer to Appendix 1: FY23 Guidance and Outlook for more detail 19 FY22 Results 12 August 2022 (~180bps) 14.0-16.0%¹ iag#20Our value proposition Medium-term margin and ROE targets Our strengths Leading brands • Scale and reach • • Superior customer experience Engaged people Innovative capital platform Our strategy Grow with our customers Build better businesses Create value through digital Manage our risks • DIA/NZ 1m customer growth ¹ Material improvement IIA Grow across Australia 400K Capture the attention of the younger generation 250K At least $250m¹ insurance profit by FY24 Direct SME (Australia) 100K New Zealand (Consumer) 250K 20 FY22 Results | 12 August 2022 Key value drivers Our aspirations Customer growth Claims management Productivity Reinsurance and capital . "Create a stronger, more resilient IAG" Sustainable dividends Top quartile TSR Productivity initiatives¹ $400m of claims value ~$2.5bn gross operating costs >80% of interactions across digital channels Reported ROE 12-13% 2 Reported Margin 15-17% 2 (1) Refer to Appendix 1: FY23 Guidance and Outlook for more detail (2) Excluding business interruption provision releases iag#2121 FY22 Results | 12 August 2022 | Investor Relations Mark Ley Mobile. +61 (0)411 139 134 Email. [email protected] Nigel Menezes Mobile. +61 (0)411 012 690 Email. [email protected] iag Media Amanda Wallace Mobile. +61 (0)422 379 964 Email. [email protected] Insurance Australia Group Limited ABN 60 090 739 923 Level 13, Tower Two, 201 Sussex Street Sydney NSW 2000 Australia Ph: +61 (0)2 9292 9222#22Appendix 1: FY23 Guidance and Outlook IAG's confidence in its strong underlying business is reflected in upgraded guidance for FY23 which includes: GWP of 'mid-to-high single digit' growth. This will be primarily rate driven to cover claims inflation, higher reinsurance costs and an increased natural peril allowance. Modest volume growth and an increase in customer numbers are expected. Reported insurance margin guidance of 14% to 16% which assumes: o Continued momentum in the underlying performance of IAG's businesses, supported by increased investment yields; o An increase in the natural peril allowance to $909 million, an increase of $144 million or nearly 19% on the FY22 allowance; o No material prior period reserve releases or strengthening; and o No material movement in macro-economic conditions including foreign exchange rates or investment markets. This guidance aligns to IAG's aspirational goals to achieve a 15% to 17% insurance margin and a reported ROE of 12% to 13% over the medium term. These goals are based on delivery of IAG's ambitions of: o An increase in the customer base of 1 million to 9.5 million by FY26; o An IIA insurance profit of at least $250m by FY24; o $400m in value from DIA claims and supply chain cost reductions on a run-rate basis from FY26; 。 Greater than 80% of customer interactions across digital channels; and o Further simplification and efficiencies to maintain the Group's cost base at $2.5 billion. 22 FY22 Results | 12 August 2022 | These goals are subject to assumptions and dependencies, including that there are no material adverse developments in macro-economic conditions and disruptions or events beyond IAG's control (for example, natural perils events in excess of IAG's allowances). iag#23Appendix 2: Reconciliation of reported to underlying to adjusted margins 1H21 2H21 1H22 2H22 FY21 FY22 INSURANCE MARGIN IMPACTS - Continuing Business A$m A$m A$m A$m A$m A$m Reported insurance margin 17.9% 9.1% 7.1% 7.7% 13.5% 7.4% Reserve releases/(strengthening) 0.4% 1.8% 0.9% 3.4% 1.1% 2.2% Natural perils Natural peril allowance Credit spreads Underlying insurance margin 7.8% 12.1% 17.2% 11.1% 9.9% 14.1% (8.8%) (8.8%) (9.6%) (9.7%) (8.8%) (9.7%) (1.4%) (0.7%) (0.5%) 1.6% (1.0%) 0.6% 15.9% 13.5% 15.1% 14.1% 14.7% 14.6% COVID-19 impact (1.7%) (1.5%) (0.9%) (0.7%) Discount rate timing impact 0.4% 0.7% 0.5% Adjusted underlying insurance margin 14.2% 13.5% 14.0% 14.8% 13.8% 14.4% 23 FY22 Results | 12 August 2022 iag