Morgan Stanley assesses Insurance Australia Group can improve its 2021 underlying combined operating ratio by three percentage points versus 2018.

However, it is getting tougher to find improvements, and the broker notes the company has less catastrophe budget left to June 2020 compared with its peers.

Equal-weight rating. Target is $7.90. Industry view: In Line.

Sector: Insurance.

Target price is $7.90.Current Price is $6.63. Difference: $1.27 - (brackets indicate current price is over target). If IAG meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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