Insurance Australia Group saw a modest price rise in it's New South Wales compulsory third party new business pricing. Morgan Stanley does not expect margin improvement in the segment.

Home and motor new business slowed to a near halt during the September quarter, reflecting the community's inability to afford additional  price increases.

The Equal-weight rating and target price of $4.80 are retained. Industry view: In-line. 

Sector: Insurance.

Target price is $4.80.Current Price is $5.12. Difference: ($0.32) - (brackets indicate current price is over target). If IAG meets the Morgan Stanley target it will return approximately -7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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