Morgan Stanley said it favors Suncorp Group over Insurance Australia Group based on stronger revenue momentum and a greater potential for multiple expansion, according to a research note released Monday.
The bank’s March 2026 premium survey revealed divergent trends across product lines. Home insurance pricing rose 6% year-over-year, while motor insurance growth lagged at 1% year-over-year after Allianz reduced motor prices. When Allianz is excluded from the sample, motor pricing rose in the range of 3% to 4% year-over-year.
New motor premiums in the March 2026 quarter expanded 1% year-over-year, a notable slowdown from the 10% year-over-year gain recorded in the December 2025 quarter. Among insurers included in the survey, Suncorp implemented the largest motor price increases, while Allianz trimmed motor pricing to more competitive levels, the bank said.
The survey also highlighted a 9.5% year-over-year increase in Queensland compulsory third party premiums, a segment that the research note said benefits Suncorp.
Home insurance showed stronger momentum in the March quarter, with new premiums up 6% year-over-year, accelerating from 3% in the prior quarter. The note said most insurers raised home pricing, although IAG reduced its home prices to align with market levels. Excluding IAG, home premiums were estimated to be roughly 10% higher year-over-year.
Morgan Stanley flagged upside for further home pricing increases, pointing to rising input costs. The bank specifically noted an expectation that plastic pipe prices could climb by more than 30%, a factor that places upward pressure on repair and replacement expenses.
On projected premium growth, Morgan Stanley forecast organic gross written premium growth of 5.5% at Suncorp Consumer in fiscal 2026, compared with 3.5% at IAG. The combination of stronger pricing execution, favorable movements in specific product segments and higher forecasted organic growth underpins the bank’s relative preference for Suncorp.
Key points
- Home insurance pricing accelerated to 6% year-over-year in March 2026, up from 3% in December.
- Motor insurance pricing slowed to 1% year-over-year in March 2026, with Allianz reducing motor prices; excluding Allianz motor pricing rose 3% to 4% year-over-year.
- Morgan Stanley forecasts 5.5% organic gross written premium growth at Suncorp Consumer in FY2026 versus 3.5% at IAG.
Sectors impacted - Insurance, property and casualty lines, motor repair and home construction supply chains.
Risks and uncertainties
- Price competition in motor insurance - Allianz’s decision to cut motor prices contributed to weaker reported motor pricing growth and could constrain margin recovery across the motor insurance sector.
- Company-specific pricing actions - IAG’s reduction of home pricing to market levels limits observed home premium growth and may impede near-term top-line improvement for that insurer.
- Rising input costs - Increasing costs for repair inputs, such as plastic piping expected to rise by more than 30%, add uncertainty to claims inflation and insurers’ ability to fully pass through costs to customers.
The findings and projections are drawn from Morgan Stanley’s March 2026 premium survey and associated research note.