Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Day (June 2011)
84 slides from Insurance Australia's investor day presentation, Jun 14, 2011
Slide 1: Investor Briefing 14 June 2011
2011 For personal use only INVESTOR BRIEFING 14 June 2011 ABN 60 090 739 923
Slide 2: Today's Agenda
TODAY’S AGENDA A GROUP AND DIVISIONAL VIEW For personal use only 1 GROUP 4 CGU 7 ASIA OVERVIEW MIKE WILKINS PETER HARMER JUSTIN BREHENY 8.30am p.3 9:50am p.30 11:40am p.62 10:20 am Break 2 CAPITAL 5 NEW 8 IAG OF THE ZEALAND FUTURE NICK HAWKINS JACKI JOHNSON LEONA MURPHY 8:50am p.15 10:40am p.45 12:1
Slide 3: Group Overview
1 For personal use only GROUP OVERVIEW MIKE WILKINS MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER 3
Slide 4: IAG's Business Today
IAG’S BUSINESS TODAY GEOGRAPHICAL PRESENCE GROUP OVERVIEW 1 For personal use only A portfolio of general insurance businesses: • Leading and established brands in Australia and New 2 Zealand • Growing presence in Asia 3 4 • Specialist motor underwriter in the UK 5 1. 49% ownership of AmG Insurance,
Slide 5: Diversified GWP Mix – Product, Geography and Channel
IAG’S BUSINESS TODAY DIVERSIFIED GWP MIX – PRODUCT, GEOGRAPHY AND CHANNEL GROUP OVERVIEW For personal use only PRODUCT MIX REGIONAL MIX CHANNEL MIX Approximately $8bn of gross written premium Motor Australia Direct Home New Zealand Broker / agent Short tail commercial UK Affinity CTP / motor liabili
Slide 6: Corporate Strategy – Set July 2008
CORPORATE STRATEGY – SET JULY 2008 CREATING A SOLID PLATFORM GROUP OVERVIEW For personal use only • Improve our performance in Australia • ROE 1.5x WACC and New Zealand OUR TARGETS • Pursue selective • Top quartile TSR international growth options – Asia and other OUR narrow specialist opportuniti
Slide 7: Achievements Against Strategic Priorities
ACHIEVEMENTS AGAINST STRATEGIC PRIORITIES CREATING A SOLID PLATFORM GROUP OVERVIEW For personal use only STRATEGIC PRIORITES ACHIEVEMENTS Improve our performance in Significantly improved collective insurance margin in Australia and New Zealand Australia and New Zealand Delivered strong Australi
Slide 8: Clear Operational Improvement Delivered
CLEAR OPERATIONAL IMPROVEMENT DELIVERED GROUP INSURANCE MARGIN – 1H09 TO 1H11 GROUP OVERVIEW For personal use only GROUP INSURANCE PROFIT ($M) / MARGIN (%) Significant 500 480 9 12.7% improvement in 460 Group 440 420 underwriting 400 380 172 performance 360 340 320 300 2 280 470 260 42 240 6.2% 23 2
Slide 9: Home Markets Driving Improvement
HOME MARKETS DRIVING IMPROVEMENT DIVISIONAL INSURANCE PROFIT – 1H09 TO 1H11 GROUP OVERVIEW For personal use only GROUP INSURANCE PROFIT ($M) / MARGIN (%) Australia and 700 New Zealand 680 660 driving the 640 620 600 580 560 107 Group’s financial 540 520 500 198 improvement 480 29 12.7% 460 161 12 44
Slide 10: Delivering Strong Results in Home Markets
DELIVERING STRONG RESULTS IN HOME MARKETS MARKED IMPROVEMENT SINCE JULY 2008 GROUP OVERVIEW For personal use only Clear trend of top line growth and improved profitability in Australia and New Zealand AUSTRALIA AND NEW ZEALAND AUSTRALIA AND NEW ZEALAND GROSS WRITTEN PREMIUM ($M) $m INSURANCE PROFIT
Slide 11: Resetting Our Corporate Strategy
RESETTING OUR CORPORATE STRATEGY A PLATFORM FOR DELIVERY GROUP OVERVIEW For personal use only 2008 2011 2011 2016 REMEDIATING TO REALISING OUR CREATE A SOLID POTENTIAL PLATFORM 11
Slide 12: Resetting Our Strategic Priorities
RESETTING OUR STRATEGIC PRIORITIES A CLEAR FOCUS ON AUSTRALIA, NEW ZEALAND AND ASIA GROUP OVERVIEW For personal use only REALISING OUR POTENTIAL AMBITION STRATEGY TARGETS PRIORITIES Accelerate growth in Australia and To be the world’s Deliver superior Long term performance by New Zealand most respec
Slide 13: Shaping Our Operating Environment
SHAPING OUR OPERATING ENVIRONMENT INFLUENCING OUR INDUSTRY’S FUTURE GROUP OVERVIEW For personal use only Active involvement in policy and regulatory consultation Addressing flood insurance issues in Australia • Stricter and more transparent planning and zoning decisions • Accurate and accessible dig
Slide 14: FY11 Guidance Update
FY11 GUIDANCE UPDATE GROUP OVERVIEW • Too early to assess impact of Christchurch For personal use only FY11 GUIDANCE* earthquakes on 13 June 2011 • Prior to 13 June 2011, on track to deliver insurance Insurance margin* 8–10% margin within 8–10% guidance range: – Ongoing strong underlying performance
Slide 15: Capital
2 For personal use only CAPITAL NICK HAWKINS CHIEF FINANCIAL OFFICER 15
Slide 16: Capital Position
CAPITAL POSITION STRONG BALANCE SHEET MAINTAINED CAPITAL For personal use only Long term target range 1.45–1.5 times MCR • At 31 December 2010: – Capital requirement was $2.3bn – Group capital base of $4.2bn – Equated to MCR of 1.81 times Dividend policy to pay 50–70% of cash earnings • Provides suf
Slide 17: Reinsurance
REINSURANCE KEY ELEMENT OF CAPITAL MANAGEMENT CAPITAL For personal use only Resilient long term source of capital • Longstanding relationships – some for over 50 years • Diversified panel of 30+ reinsurers with strong counter-party credit profile • Continuing availability of reinsurance capital Upwa
Slide 18: Reinsurance – Relative Significance
REINSURANCE RELATIVE SIGNIFICANCE CAPITAL • Consistent reinsurance expense in For personal use only GROUP REINSURANCE EXPENSE recent years (as % of GWP) • Uptick in FY10 mainly due to cost of ADC in UK 700 8.0% 8.5% 7.1% • Group reinsurance expense of 600 6.3% 6.2% 6.3% 6.3% 6.2% 7.5% c.$500m (ex AD
Slide 19: Reinsurance – Programme Structure and Perils Update
REINSURANCE PROGRAMME STRUCTURE AND PERILS UPDATE CAPITAL For personal use only Two main aspects to catastrophe cover • Capital preservation – main programme up to $4.1bn • Reduced earnings volatility – lower level and subsequent event covers, including aggregate Potential changes to 2012 programme
Slide 20: Investment Portfolio
INVESTMENT PORTFOLIO CONSERVATIVE MIX AND HIGH CREDIT QUALITY CAPITAL SHAREHOLDERS’ FUNDS For personal use only TOTAL INVESTMENT TECHNICAL RESERVES PORTFOLIO – $11.8BN 0.2% 19.8% Australian equities $3.7bn Shareholders' Alternatives International funds equities 5.0% Technical Fixed interest Alternat
Slide 21: Questions
For personal use only QUESTIONS Mike Wilkins and Nick Hawkins 21
Slide 22: Australia Direct
3 For personal use only AUSTRALIA DIRECT Accelerating growth in home markets ANDY CORNISH CHIEF EXECUTIVE OFFICER 22
Slide 23: Business Overview
BUSINESS OVERVIEW AUSTRALIA’S LEADING DIRECT INSURER AUSTRALIA DIRECT Australia’s leading direct insurer For personal use only • State based brands, leading market positions in NSW and Victoria • One distribution system^, pricing engine, claims system • GWP over $3.6bn • Over 3.5m customers#; over 4
Slide 24: Current Market Environment
CURRENT MARKET ENVIRONMENT INCREASED COMPETITION AUSTRALIA DIRECT System growth Competitive dynamics For personal use only Motor Asset Base 3.0% • New players pursuing different business models 2.5% with limited traction 2.0% 1.5% • Mainstream brands not using aggregators 1.0% 0.5% 0.0% • Competitor
Slide 25: Our Achievements
OUR ACHIEVEMENTS PROGRESS AGAINST THE PRIORITIES WE SET IN 2009 AUSTRALIA DIRECT For personal use only Industry-leading risk selection and pricing Customer insights and delivery • Further refined technical risk analysis • Customer insights framework, segmentation • Granular pricing at an individual
Slide 26: Our Achievements – Real Results Delivered
OUR ACHIEVEMENTS REAL RESULTS DELIVERED AUSTRALIA DIRECT For personal use only Marketing spend stable, effectiveness up Tighter expense management New business cost down 24% ~13% reduction FY09 FY10 FY11(f) FY09 FY10 FY11(f) Business now achieving profitable, above market, Internet sales trebled sin
Slide 27: Focus for the Future – Strategic Drivers
FOCUS FOR THE FUTURE STRATEGIC DRIVERS OF SUSTAINABLE, PROFITABLE GROWTH AUSTRALIA DIRECT For personal use only CUSTOMER INSIGHTS THE RIGHT PRICE Commercialised Insurance risk selection that’s easy to and pricing have and use Industrialised low cost delivery CONSISTENT EXECUTION Customer led insuran
Slide 28: Focus for the Future – To Out-Compete and Grow
FOCUS FOR THE FUTURE TO OUT-COMPETE AND GROW AUSTRALIA DIRECT For personal use only Immediate focus Organic growth opportunities • Further improve marketing effectiveness Maximising the value of the existing • Maximise multi-distribution model customer base − Cross-selling and up-selling products •
Slide 29: Outlook
OUTLOOK MAINTAIN PROFITABLE GROWTH AUSTRALIA DIRECT For personal use only Short term Long term • Maintain profitable growth momentum • Recovery of reinsurance expenses • Reinsurance rates may place pressure on • Continue to leverage strategic drivers to fuel margin profitable growth momentum • Conti
Slide 30: Australia Intermediated (CGU)
4 For personal use only AUSTRALIA INTERMEDIATED (CGU) Accelerating growth in home markets PETER HARMER CHIEF EXECUTIVE OFFICER 30
Slide 31: Business Overview – Diverse Portfolio Mix
BUSINESS OVERVIEW DIVERSE PORTFOLIO MIX CGU • Large SME portfolio For personal use only • Australia's largest regional and rural insurer • Growing capability in the corporate market • Major provider of workers' compensation services PRODUCTS CUSTOMER SEGMENTS Commercial short tail SME Personal lines
Slide 32: Business Overview – Diverse Distribution Footprint
BUSINESS OVERVIEW DIVERSE DISTRIBUTION FOOTPRINT CGU For personal use only ~8% of total Australian general insurance market ~14% of Australian intermediated general insurance market DISTRIBUTION CHANNELS BRANCH NETWORK GEOGRAPHIC SPLIT Brokers & VIC authorised NSW/ACT representatives QLD Financial W
Slide 33: Current Market Environment – Pricing Remains Patchy
CURRENT MARKET ENVIRONMENT PRICING REMAINS PATCHY CGU For personal use only Workers’ Personal lines SME Corporate Compensation* Rate movements Increasing claim Solid capacity Recent numbers Catastrophe costs Key drivers Increasing catastrophe Average claim Claims inflation events competition
Slide 34: Current Market Environment – A Changing Landscape
CURRENT MARKET ENVIRONMENT A CHANGING LANDSCAPE CGU For personal use only • Frequency and scale of events has increased Natural perils • Increasing claim costs Reinsurance • Reinsurance costs expected to rise costs • Rate increases necessary • Higher level of public and political scrutiny Regulation
Slide 35: Distribution – Technology Evolving to Drive Efficiencies
DISTRIBUTION TECHNOLOGY EVOLVING TO DRIVE EFFICIENCIES CGU For personal use only • Marketplace hubs – lack of automated contestable quoting has led to limited efficiency benefits • Major brokers now developing their own contestable quoting platforms to drive internal efficiencies • Underlying sales
Slide 36: Improved Performance Demonstrates Underlying Turnaround
OUR ACHIEVEMENTS IMPROVED PERFORMANCE DEMONSTRATES UNDERLYING TURNAROUND CGU For personal use only 154 133 112 55 35 61 51 1 27 19 -7 10 -23 -59 1H08 2H08 1H09 2H09 1H10 2H10 1H11 Reported Insurance Result Underlying Performance Underlying Performance: excludes reserve releases, actual natural peril
Slide 37: Strategic Drivers Behind the Turnaround
OUR ACHIEVEMENTS STRATEGIC DRIVERS BEHIND THE TURNAROUND CGU For personal use only Underwriting • Pricing discipline and risk selection management Claims • Reducing indemnity and claims handling costs management Customer & • Focused customer value propositions and building brand awareness brand Busi
Slide 38: Focus for the Future – Leader in Intermediated Insurance
FOCUS FOR THE FUTURE LEADER IN INTERMEDIATED INSURANCE CGU For personal use only 38
Slide 39: Strategic Themes – Channel Management
STRATEGIC THEMES CHANNEL MANAGEMENT CGU For personal use only GROWTH CLIENT-CENTRIC CULTURE Channel sales Channel sales Channel sales People & skills Technology & tools strategy & planning management processes Market/intermediary Sales methodology Manage relationships Organisational, CRM solutions s
Slide 40: Strategic Themes – Customer and Market Insights
STRATEGIC THEMES CUSTOMER AND MARKET INSIGHTS CGU For personal use only Customer-centric perspective Further differentiate offering Customer Refine value drivers Design & deliver Refine Customer and market and customer customer Monitor Value Propositions insights segments experiences • Intermediarie
Slide 41: Strategic Themes – Underwriting Expertise
STRATEGIC THEMES UNDERWRITING EXPERTISE CGU For personal use only Managing latent & Strategic portfolio Underwriting rigour Pricing discipline emerging risks management & risk selection UNDERWRITING EXPERTISE Portfolio Portfolio strategy Underwriting Underwriting Reinsurance performance & planning f
Slide 42: Focus for the Future – Clear Priorities
FOCUS FOR THE FUTURE CLEAR PRIORITIES CGU For personal use only Double digit insurance margin Commitment to Focus on Expense base core strategy profitable growth management Three years into five-year Sales led relationship-based Profitability supported by strategy account management expense base red
Slide 43: Outlook
OUTLOOK FURTHER IMPROVEMENT EXPECTED CGU For personal use only Short term Long term • Continued execution of core strategy to drive • Impacted by significant catastrophe costs improved underlying performance • Clarity still emerging around impact of • Focus on profitable growth catastrophe environme
Slide 44: Break
For personal use only BREAK The presentation will resume shortly 44
Slide 45: New Zealand
5 For personal use only NEW ZEALAND Accelerating growth in home markets JACKI JOHNSON CHIEF EXECUTIVE OFFICER 45
Slide 46: Business Overview – New Zealand's Largest General Insurer
BUSINESS OVERVIEW NEW ZEALAND’S LARGEST GENERAL INSURER NEW ZEALAND For personal use only • GWP NZ$1.2bn The largest general • More than 2,000 full time equivalent employees insurer in New Zealand, with a broad base across • Market share of approximately 33% three major channels • More than 1m custo
Slide 47: Current Market Environment – A Changing Landscape
CURRENT MARKET ENVIRONMENT A CHANGING LANDSCAPE NEW ZEALAND For personal use only Political • Introduction of Prudential Supervision Act • Opening of ACC workers’ account Customers and Businesses • Changing consumer demographics • SMEs still dominate the landscape with c.90% of businesses employing
Slide 48: Christchurch Earthquake Impacts
CURRENT MARKET ENVIRONMENT CHRISTCHURCH EARTHQUAKE IMPACTS NEW ZEALAND For personal use only Impact of Christchurch earthquakes (September 2010 and February 2011) • Combined estimated cost to insurance industry of over NZ$19bn • Australasia natural perils significantly increasing the cost of reinsur
Slide 49: Delivered on Our 2009 Strategic Priorities
OUR ACHIEVEMENTS DELIVERED ON OUR 2009 STRATEGIC PRIORITIES NEW ZEALAND For personal use only Return on Risk • Established return on risk based capital as key driver for pricing decisions Based Capital • Exited under performing partnerships and products • Tactical pricing reviews for State, NZI and
Slide 50: Improved Outcomes Evident in 2011
OUR ACHIEVEMENTS IMPROVED OUTCOMES EVIDENT IN 2011 NEW ZEALAND For personal use only Insurance result (A$m) Customer advocacy 35 30 28 23 FY09 14 14 FY11 90 68 63 State NZI Business Partners Source: IAG and IBANZ surveys 17 Our people 88 (17) 1H09 2H09 1H10 2H10 1H11 84 83 FY09 81 FY11 Engagement Ri
Slide 51: Focus for the Future – Strategy
FOCUS FOR THE FUTURE STRATEGY NEW ZEALAND PURPOSE 2015 For personal use only “To be NZ’s insurer of choice by being the easiest to interact with” Return on Risk Based Capital DASHBOARD 2015 5.5/10 Customer advocacy $26.5/$100 efficiency Businesses & +1 policy per customer score of 50% rating househo
Slide 52: Focus for the Future – Key Strategic Initiatives
FOCUS FOR THE FUTURE KEY STRATEGIC INITIATIVES NEW ZEALAND For personal use only Alignment of operating Differentiated capability Evolution of e-business Customer led systems + structure to deliver clarity + culture strategy processes and accountability 52
Slide 53: Outlook – Positive Momentum
OUTLOOK POSITIVE MOMENTUM NEW ZEALAND For personal use only Short term Long term • Strong underlying financial performance: • Continued financial performance: – Sustainable profitable growth – GWP growth will be driven by passing through increased reinsurance costs – Leading risk management – Ongoin
Slide 54: United Kingdom
6 For personal use only UNITED KINGDOM Restoring profitability IAN FOY CHIEF EXECUTIVE OFFICER 54
Slide 55: Business Overview – Largest Lloyd's Motor Syndicate
BUSINESS OVERVIEW LARGEST LLOYD’S MOTOR SYNDICATE UNITED KINGDOM EQUITY RED STAR (ERS) For personal use only • Largest Lloyd’s personal lines syndicate • Diverse and broad based book ranging from fleets to classic cars • Distributes through selected 3rd party brokers who deliver over 80% of ERS volu
Slide 56: Business Overview – Diversified GWP Mix
BUSINESS OVERVIEW DIVERSIFIED GWP MIX UNITED KINGDOM For personal use only GWP PRODUCT MIX Remediation driving changed mix Fleet • Reduction in overall GWP as a result of remedial Private car broker action Private car direct (affinity motor) • Significant reduction in external broker-sourced Commerc
Slide 57: Current Market Environment – The Road Travelled
CURRENT MARKET ENVIRONMENT THE ROAD TRAVELLED UNITED KINGDOM Competition Economic For personal use only • Aggregators continue to present a pricing challenge • Increased prevalence of fraud • Aggregators account for c.55% of new private motor business • Decline in investment returns • Private motor
Slide 58: Current Market Environment – The Road Ahead
CURRENT MARKET ENVIRONMENT THE ROAD AHEAD UNITED KINGDOM Competition Economic For personal use only • The need for market recovery will drive further rate increases • Interest rates are likely to rise • The UK market will grow by both volume and premium • Economic recovery may reduce recession drive
Slide 59: Our Achievements – Building the Fundamentals
OUR ACHIEVEMENTS BUILDING THE FUNDAMENTALS UNITED KINGDOM For personal use only Immediate rate increases There are signs of recovery Exited unprofitable relationships however change takes time: Ceased writing non targeted external aggregators (non-bike) Underwriting Deep-dive review of all m
Slide 60: Focus for the Future – Driving Forward
FOCUS FOR THE FUTURE DRIVING FORWARD UNITED KINGDOM Horizon 1: Accelerated Remediation Horizon 2: Re-focus Horizon 3: Sustainable Position For personal use only CY2011 CY2012 Beyond • Redoubled our efforts • A return to our core strengths • Passionate about motor • Aggressive re-pricing across the p
Slide 61: Outlook – Return to Fundamentals
OUTLOOK RETURN TO FUNDAMENTALS UNITED KINGDOM For personal use only Short term Long term • Strengthened senior leadership team • Improving market environment • Capable and passionate employees • Positive contribution to Group performance dedicated to restoring performance and profitability • 2010 an
Slide 62: Asia
7 For personal use only ASIA Boost Asian footprint – 10% of Group GWP by 2016 JUSTIN BREHENY CHIEF EXECUTIVE OFFICER 62
Slide 63: A Portfolio of High Growth Businesses
BUSINESS OVERVIEW A PORTFOLIO OF HIGH GROWTH BUSINESSES ASIA For personal use only COUNTRY INDIA THAILAND MALAYSIA BUSINESS INDIA Safety Insurance • JV with India’s largest • Personal lines insurer • Commercial insurer • JV with AmBank DESCRIPTION bank, the State Bank of • 3rd largest motor • 3rd la
Slide 64: Our Achievements – Operational Improvement and Focused Business Development
OUR ACHIEVEMENTS OPERATIONAL IMPROVEMENT AND FOCUSED BUSINESS DEVELOPMENT ASIA For personal use only OBJECTIVES ACHIEVEMENTS Further improvement in Malaysian and Thai businesses performing in line with expectations performance of existing businesses IAG executive appointed AmG CEO, has delivered
Slide 65: Strategic Journey
STRATEGIC JOURNEY FOCUS HAS EVOLVED FROM INITIAL ENTRY TO BUILDING SCALE ASIA For personal use only HORIZON 1 HORIZON 2 HORIZON 3 Since 2005 2010-2015 Beyond 2015 Horizon Initial market entry Enter new markets; build platform Mature end state Increasing operational focus Decreasing M&A focus • Targe
Slide 66: Strategic Direction – 10% of Group GWP by 2016
STRATEGIC DIRECTION TO BE 10% OF GROUP’S GWP BY 2016 (PROPORTIONAL BASIS) ASIA For personal use only Vision • Create a high growth, high value portfolio of general insurance businesses in Asia • To be 10% of the Group’s GWP by 2016 (proportional basis) Goal • Achieve ROE no less than WACC within 3-5
Slide 67: Strategic Focus – Macro Indicators of Six Priority Markets
STRATEGIC FOCUS MACRO INDICATORS – ATTRACTIONS OF OUR SIX PRIORITY MARKETS ASIA FIVE YEAR FORECAST GDP & GWP GROWTH 2011-2015 For personal use only 30% China and India 26% 25% • Top 1 and 2 global populations 20% 17% • Highest forecast GDP growth in Asia 15% 15% 15% • High GWP growth rates 10% 8% 9%
Slide 68: India: Market Environment
INDIA: MARKET ENVIRONMENT RAPID ECONOMIC AND GENERAL INSURANCE INDUSTRY DEVELOPMENT ASIA For personal use only INDIA: PASSENGER CAR SALES INDIA: GWP (A$BN) Growth Units 10 63 2.1 9 56 2.0 8 49 1.9 7 42 1.8 6 35 1.7 5 28 1.6 4 21 1.5 3 14 1.4 2 7 1.3 1 0 1.2 0 Sep-09 Sep-10 Jan-10 Jan-11 Jul-09 Nov-0
Slide 69: India: Business Snapshot
INDIA: BUSINESS SNAPSHOT OPERATIONAL ROLLOUT IS ON TRACK ASIA Phased roll-out For personal use only • JV agreement signed November 2008, A$126m contributed to JV November 2009, and general insurance licence received from IRDA in December 2009 TARGET CUSTOMER MIX • Approvals for 29 products in place,
Slide 70: India: Focus for the Future
INDIA: FOCUS FOR THE FUTURE TO ACHIEVE A$1BN IN GWP IN FIVE YEARS (2016) ASIA For personal use only Top 5 position in • This equates to A$1bn in GWP by 2016 (100% basis) private sector with 5% market share by • Make the most of SBI’s brand and distribution strength to secure a sustainable, profitabl
Slide 71: Thailand: Focus for the Future
THAILAND: FOCUS FOR THE FUTURE ACHIEVE TOP 2 POSITION IN MOTOR ASIA For personal use only Top 2 position • Continue momentum to grow to top 2 position in motor – from top 4 position in 2009, top 3 in motor position in 2010 Safety Insurance Maintain • Growth achieved through organic expansion – focus
Slide 72: Malaysia: Focus for the Future
MALAYSIA: FOCUS FOR THE FUTURE OBTAINING A MARKET LEADERSHIP POSITION ASIA For personal use only • By organic growth (strategic initiatives focused on improved penetration and renewal No. 1 in motor retention) and through acquisition Lead in niche • Strategic initiatives targeting specific industrie
Slide 73: Market Entry: China, Indonesia and Vietnam
MARKET ENTRY: CHINA, INDONESIA AND VIETNAM SIGNIFICANT PROGRESS IN TARGET MARKETS ASIA CHINA INDONESIA VIETNAM For personal use only • Strong economic fundamentals: 2010 • Largest economy in SE Asia – growth • Second fastest growing economy in GDP +10.3%; 9% in next 5 years outlook similar to India
Slide 74: Outlook – Boosting the Group's Asian Footprint
OUTLOOK BOOSTING THE GROUP’S ASIAN FOOTPRINT ASIA For personal use only Contributing 10% of the Group’s GWP by 2016 (proportional basis) • India – Grow SBI General Insurance to top 5 position in private sector with 5% market share and A$1bn revenue by 2016 • Malaysia – Grow AmG to number 1 position
Slide 75: IAG of the Future
For personal use only 8 IAG OF THE FUTURE LEONA MURPHY GROUP EXECUTIVE CORPORATE OFFICE 75
Slide 76: Influences on Our Success
INFLUENCES ON OUR SUCCESS IAG OF THE FUTURE For personal use only REALISING OUR POTENTIAL AMBITION STRATEGY TARGETS PRIORITIES Accelerate growth in Australia and To be the world’s Deliver superior Long term performance by New Zealand most respected financial targets: group of general actively managi
Slide 77: Group-wide Talent Management to Enable Our Ambition
GROUP-WIDE TALENT MANAGEMENT TO ENABLE OUR AMBITION IAG OF THE BUILDING THE WORKFORCE OF THE FUTURE FUTURE For personal use only Assess Defining and measuring Gauging success readiness for succession Results • Talent retention Business • Enhanced management and leadership capability and • Multi-leve
Slide 78: Benefits of Risk Expertise
BENEFITS OF RISK EXPERTISE IAG OF THE TANGIBLE, POSITIVE OUTCOMES FUTURE For personal use only Share More Broader More Increased Detailed knowledge Lower cost efficient risk affordable market under- with and and reduction insurance share and standing customers likelihood equitable and and scale of r
Slide 79: IAG's Value-add as Risk Experts – Sharing Knowledge
IAG’S VALUE-ADD AS RISK EXPERTS IAG OF THE SHARING KNOWLEDGE TO HELP PREVENTION FUTURE For personal use only 79
Slide 80: IAG's Value-add as Risk Experts – Resilient Communities
IAG’S VALUE-ADD AS RISK EXPERTS IAG OF THE MAKING COMMUNITIES MORE RESILIENT FUTURE For personal use only 80
Slide 81: Effectively Managing Risk – Three Pillars
EFFECTIVELY MANAGING RISK IAG OF THE THREE PILLARS FUTURE AREAS OF FOCUS For personal use only Adaptation and Risk Prevention Insurance Reach Resilience OBJECTIVES Risk transfer should always be an Identification of emerging risks, When the risk can’t be avoided, use our option. Looking at the types
Slide 82: Summary
9 For personal use only SUMMARY MIKE WILKINS MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER 82
Slide 83: Resetting Our Strategic Priorities
RESETTING OUR STRATEGIC PRIORITIES A CLEAR FOCUS ON AUSTRALIA, NEW ZEALAND AND ASIA SUMMARY For personal use only REALISING OUR POTENTIAL AMBITION STRATEGY TARGETS PRIORITIES Accelerate growth in Australia and To be the world’s Deliver superior Long term performance by New Zealand most respected fin
Slide 84: Business Model and Brands
BUSINESS MODEL AND BRANDS DIRECT INTERMEDIATED ONLINE DIRECT DIRECT INTERMEDIATED For personal use only INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE 2 3 4 UNITED KINGDOM NEW ZEALAND AUSTRALIA 5 ASIA INTERMEDIATED INTERMEDIATED INSURANCE INSURANCE OTHER 1 ACTIVE PORTFOLIO MANAGEMENT &