Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Debt Investor Presentation (November 2004)
22 slides from Insurance Australia's debt investor presentation, Nov 22, 2004
Slide 1: Insurance Australia Group cover letter
Insurance Austrailia Group Limited ABN 60 090 739 923 388 George Street Sydney NSW 2000 Telephone 02 9292 9222 iag.com.au 22 November 2004 Manager, Company Announcements Office y Australian Stock Exchange Limited Level 4, Exchange Centre 20 Bridge Street l AG SYDNEY NSW 2000 Insurance Australia Grou
Slide 2: Disclaimer
AG Finatige (New Zealand) Limite welrotlye A i Group Limited Lead Mongijéy & Bookrunner eu UBS 1A Fiennes (ew Zona Lion ABN U7 118 288-243 _nitia saio ggig Disclaimer © IAG + This presenlation has bean authorigod by ‘AG Finance (New Zoaland) Limited (ABN SF 111 268 243} QAG Finance (NZ) or Issuer),
Slide 3: Agenda
Agenda + Why issue RES? « Offer summary * [AG and the issuer « Reset Exchangeable Securities + Syndicate, bookbuild & timetable STATE wiinja — scto gag (cay we usatanee pou George Venardos George Venardos George Venardos Michael Woods UBS ao] 1&d Finance (New Zaalans} Limiles ABN U7 118 288-243 3 Wh
Slide 4: RES — Capital and risk management initiative
RES — Capital and risk management YIAG initiative ° + RES are a new type of security for IAG + IAG has sufficient Tier 1 capital—hence there is no need to issue Preference Shares now + 1AG’s key wholly-owned insurers hold Insurer Financial Strength Ratings of ‘AA'—currently the highest S&P rating of
Slide 5: IAG and the Issuer
IAG and the Issuer 1&d Finance (New Zaalaes} Limiles ? zie 2 ¢ NEMA Scio sgiG }. 4 ABN G7 115 288 243, Leading general insurance group in Australia and New Zealand via| Nd INSURANTE ssi SGIO sTaTE [eS + Market leader (by GWP) in each of Australia & New Zealand—annual GWP of A$6.4 billion + Owns lead
Slide 6: Offer summary
Offer summary @q@ IAG * Issuer - JAG Finance (New Zealand) Limited, through its New Zealand branch = Whally-owned subsidiary of IAG + Offer Size - Up to $600 millian of Reset Exchangeable Securities (RES) — Issue price of $100 each-—up to five million securities ~ Ability 1o accept aversubscriptians
Slide 7: Business and profit growth
Business and profit growth Insurance profit FYOt FYa2 FyoR Return on equity Average normalise, as FYO4 YIAG Insuracce srargiet Expected tong term range } eye reece Y03 fia 26 Dividends por ordinary share 20 g gs 10 " FYOI Pyog FYe3 Yad . Pea ae Se foetaned Rae EL ou fe a sie rced 4 nee (Ne Zealand}
Slide 8: IAG financial position
IAG IAG financial position © + Capitalisation of ordinary shares of $9.1bn as at 19 November 2004 — Ranked among the 25 largest Australian listed companies + Balance sheet as at 30 June 2004 — Total assets of $16.3bn — Net assets of $4.2bn (net tangible assets of $2.8bn) — RES will not be recognised
Slide 9: Group borrowings & RPS as at June 2004
Group borrowings & RPS as at 30 June © IAG 2004 — + Current borrowings include — Senior borrowings of $91m with 'AA’ S&P rating + NZ$100m, NZ$5Om maturing in each of August 2005 and August 2007 $300m of domestic subordinated (10 nc 5) notes » Issued November 2002 with a 'AA- S&P rating, legal maturi
Slide 10: Strategic goals updated
Strategic goals updated + Top quartile total shareholder return + Return on Equity of at least 1.5 times WACC on normalised basis + Establish an Asian foothold + Maintain 80:20 mix of short-tail:long-tail gross written premium + Maintain insurer Financial Strength ratings of ‘AA’ from S&P for key wh
Slide 11: IAG Finance (NZ)
IAG Finance (NZ) + IAG Finance (NZ) is a wholly-owned subsidiary of IAG and Issuer of RES through its New Zealand branch + The Issuer has responsibility for raising finance for the New Zealand subsidiaries of the Group and for managing their treasury requirements + The Board of the issuer comprises:
Slide 12: Reset Exchangeable Securities
Reset Exchangeabie Se Nitia saio sgig if wea 1&d Finance (New Zaalans} Limiles ABN U7 118 288-243 Reset Exchangeable Securities Reset Exchangeable Securities (RES) Issued by [AG Finance (NZ) @lac STATE 4 16S Finance (New Zealans} Limiles ABN 7 118 238 248 2 11
Slide 13: RES: issued by IAG Finance (NZ)
RES: issued by IAG Finance (NZ) quiac + Reset Exchangeable Securities - Perpetual, subject to rights to Redeem, Exchange or Convert - The gross proceeds of the offer will, through intra-group arrangements, be invested in a ‘AAAP S&P rated portfolio (Portfotic) held beneficially for RES Holders - RES
Slide 14: RES: Interest Payments
RES: interest Payments + There are two Interest Payments tests: — Test 1: Interest Payments will only be paid in full if the Net Portfolio Income exceeds the aggregate Interest Payment as at the Interest Payment Date (if test failed, the aggregate interest Payment to RES Holders will only be paid up
Slide 15: RES: Holder redemption
RES: Holder redemption + RES Holders can request redemption of some or all RES to the Issuer — onany Reset Date — ifa Trigger Event has occurred + Trigger Event includes: — Interest Payment Tests satisfied and Interest Payment not paid in ful within 20 Business Days of Interest Payment Date — Liquid
Slide 16: RES: Redemption or Conversion by Issuer
RES: Redemption or Conversion by quiac issuer + issuer may initiate Redemption or Conversion of all or some RES: — Ona Reset Date, by giving 35 Business Days notice prior fo the Reset Date — Ifa Regulatory, Tax or Acquisition Event has occurred — if there are less than one million RES on issue—in wh
Slide 17: Exchange: IAG's Exchange Right
Exchange: [AG’s Exchange Right + IAG may, at its absolute discretion, Exchange RES into Preference Shares issued by IAG at any time + One Preference Share will be delivered to RES Holders for each RES Exchanged + On Exchange IAG will send a notice to RES Holders stating: — Number of RES to be Exchan
Slide 18: Preference Shares: Issued by IAG
Preference Shares: Issued by IAG quiac + Issue of Preference Shares on Exchange - Fully-paid preference shares in the capilai of (AG - Rank equally with RPS1 and RPS2 and are expected to qualify as Tier 1 capital - Hissued, the Preference Share Issue Price will be equivalent to the Redemption Amount
Slide 19: Syndicate and bookbuild timetable
Syndicate, bookbuild & 7 i NGM scio ggig cau & 1&d Finance (New Zaalans} Limiles wea senor eee 28 36 Syndicate and bookbuild timetable Lead Manager and Bookrunner: UBS AG, Australia branch Senior Co-Managers: — Citigroup Global Markets, Goldman Sachs JBWere, Macquarie Equities, Ord Minnett & UBS Pri
Slide 20: Offer: indicative timetable
Offer: indicative timetable Record daté—Eligibla RPS Holders ‘Ansouncement of Offer and lodgement of Prospectus with ASIC Bookbuild RES initia! Margin announced Opening Date Closing Date for RPS Offer and General Offer Closing Date for Broker Firm Offer Issue Date Commencement of trading on ASX of 4
Slide 21: IAG Capitalisation as at 30 June 2004
zo . 1A Finance (ew Zealand} Limos NEMA Scio sgic a4 AGN OT 115 288 248 IAG Capitalisation as at 30 June 2004 Quiac Fotat Gapstatisstion as ot Shortterin debt ce Longer debt: : ! sy sug yet Totatlongrfotin debt Tota doit Shareholders! Eauity : : ef asa esata 8 ences ost Set ee oy Revel srscere share
Slide 22: Important information
important information ‘The information in shis prosanta¥ion ie 20 ovstview snd doee hot conta at ision. Ws Zumanery of certain ovine rlting 1s Bs osu, IG ond iNSrssubaaarion(asou) and dses hat putper fo be completa dauespten oft Group ox the on. ‘The po forets tnanciat Intended fo i parpesas ony, sn
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