Bell Potter Head of Research, TS Lim has maintained a BUY rating for Insurance Australia Group (IAG)

Bell Potter Head of Research, TS Lim has maintained a BUY rating for Insurance Australia Group (IAG). Lim expects IAG's acquisition of Wesfarmers' insurance underwriting business to surprise on the upside, with synergies of $178m. Estimates, price target and rating are unchanged pending the outcome of the New Zealand Commerce Commission decision. Longer term, Lim remains positive about IAG given the quality of management, strength of underlying fundamentals including capital position, cost synergies still to flow from CGU and being one of the few Australian financial services players capable of generating ROE close to 20%. Bell Potter research reports are available to our clients via our website (VIEW LINK)