Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Shareholder Meeting (November 2005)
28 slides from Insurance Australia's shareholder meeting presentation, Nov 9, 2005
Slide 1: Cover letter to ASX: Annual General Meeting
Insurance Australia Group Limited ABN 66 690 739 923 388 George Street Sydney NSW 2000 Telephone 02 9292 9222 lag.com.au 9 November 2005 Manager, Company Announcements Office Australian Stock Exchange Limited Level 4, Exchange Centre 20 Bridge Street IAG SYDNEY NSW 2000 insurance Australia Group Dea
Slide 2: Address by Mr James Strong, Chairman
Address by Mr James Strong, Chairman Insurance Australia Group Limited 2005 Annual General Meeting 9 November 2005 Introduction Before we commence the formal part of the meeting today, | would like to provide a brief overview of Insurance Australia Group’s performance for the 2005 financial year, wi
Slide 3: Chairman's address: capital and risk management
than cheque, is faster, more secure and, importantly, reduces costs for all shareholders. | am pleased to say that the vast majority of shareholders have signed up to the new payment method. However, if you're one of the few who hasn't, forms are available today at the information desk, can be reque
Slide 4: Governance and remuneration report
Reputation Committee and the Asia Management Advisory Council. We also adopted a new conflict of interest policy. In line with recent amendments made to the Corporations Act, we also provided shareholders with a separate remuneration report, which is located within the annual report. You will have t
Slide 5: Directors' fee pool and future priorities
performance and develop appropriate returns to shareholders. Since listing, the Group has doubled in size. At the same time, the demands of directors of listed companies and, in particular, general insurance companies, have increased through corporate legislation and regulation. When viewed in compa
Slide 6: Annual General Meeting 2005 - Michael Hawker, CEO
Annual General Meeting 2005 ex: Michael Hawker Chief Executive Officer 9 November 2005
Slide 7: Overview
Overview * Year in review * Strategy update * Outlook
Slide 8: Year in review
Year in review » IAG posted another year of record results in a complex operating environment, enabling us to generate consistent returns for our shareholders, create a stable working environment for our people, make a positive contribution to the community and provide security for our customers.
Slide 9: A record performance
Shareholders | A record performance 760 = 2002 2003 2004 2005 @ Net profit attributable to all shareholders ($ millions) 4 « The Group produced the strongest result in its history with a net profit after tax to all shareholders of $760m for the 2005 financial year (FY05), up 14.3% from the $665m for
Slide 10: Revenue growth continues
Shareholders | Customers | Gur Pe Revenue growth continues 2001 2002 2003 2004 2005 i Net earned premium ($billions) ™@ Gross written premium ($billions) Revenue growth Year Ended 30 June + Some of the elements contributing to our record profit result are highlighted on the following slides. + First
Slide 11: Continued margin improvement
Shareholders | era) Our Peo y Continued margin improvement © IAG 16.3% ie 7.6% 2001 2002 - 7 2003 UMS insurance result (Smillions) insurance margin insurance Result and Margin Year Ended 30 June 6 * This slide shows the trend in the insurance result and insurance margin, a key measure of the health
Slide 12: Double-digit dividend growth
Shareholders | Double- -digit dividend growth aig 2002 2003 Dividends per ordinary share in relation to the year ended 30 June {cents per share) « As a result, our shareholders — numbering close to one million — continue to share in the improved performance of our business over the years with an inc
Slide 13: Top quartile shareholder return
Shareholders | ners : wie | Top quartile shareholder return IAG TSR Vs S&P ASX 106 Accumulation index {Since listing on 08/08/00} 475%| —IAG TSR 150% 4 own S&P ASX 100 Accumulation Index Return Loady = ro-Bay 4 to-veg 1S zo-idy 4 go-dy 4 [~] & 9 Q 8 po-6ny 4 po-oaq 4 so-Bny | + One of the Group's fi
Slide 14: Improving capital strength
Shareholders | Improving capital strength * ‘AA’ rating, the highest of any Australian- based financial institution * Surplus capital greater than $500m * Capital more than two times regulatory requirement * Conservative reserving for claims + The Group’s capital position remains very strong. + This
Slide 15: Adding value through service
| Customers | Adding v value through service [ Deatning covomersonptins helow 802i ogmstporiate | | Catering on cae ad sarsica Claims vouataction Motos B henle (all chenmoly | [ Improving Brand awarenass Brand Heath 10 « The ability of the Group to meet/exceed customer needs is central to its capaci
Slide 16: Improving our claims management model
PE | Customers © Be el Corimnunity y Improving our claims management model © rd Centre 4. Greeting 5. The damage is 6. Taxi home or 7. Lifetime guarantee inspected and scope car taken to on repairs; quality of works prepared repairer inspections offered to all customers During the year, the Group co
Slide 17: Improving our claims management model
NGPENE » Customers | enpde | Corry 2 ) Improving our claims management model a & + Since 2003, more than 75,000 cars assessed through Care & Repair Centres in Qid, WA and SA — customer surveys show: « Satisfaction with repairs is on average 91% across these states « Quality of repairs has increased
Slide 18: Our People: clarity of purpose leveraging core skills
Our People Clarity of purpose leveraging core skills + Clear purpose aligns our people + Delivery underpinned by core values of SHAREHOLDER + Honesty VALUE + Transparency * Teamwork + Meritocracy + Social responsibility 13 » During the year we continued to focus on strengthening our internal culture
Slide 19: Community: reducing risk
Community Reducing risk IAG BiziiSafe cofffnuistyhel Putting Crime Qut of Business besafe ne SEE THINK DO Ca First in First Aid 14 A clear part of our Group’s purpose is to reduce risk in the community. We continued our focus, spending more than $12 million in direct financial assistance and dedicat
Slide 20: Managing our business sustainably
Shareholders | Customers | Our People | Community Managing our business sustainably THE FEWER THE RISKS THE BETTER — FOR EVERYONE 18 » Measuring and reporting on our financial, social and environmental performance is an integral part of delivering on our strategy to manage our business successfully
Slide 21: Award winning performance
Shareholders | Customers | Our People | Community Award winning performance Winner, General insurance Company of the Year, Australia and New Zealand Insurance industry Awards Winner, Best first time reporter in sustainability reporting, ACCA Award Winner, NZi Underwriter of the Year, IBANZ Conferenc
Slide 22: Strategy update
Strategy update 7 17
Slide 23: Strategy remains on track
Strategy remains on track Simultaneously researching i ¢ as now for internationally applicable core _—_—_ competencies Progress «<— Delivered Time 18 + This diagram represents our strategic focus over time, which remains unchanged. » The Group is now in a transitional phase, having generated scale a
Slide 24: Strategic goals on track
| Strategic goals on track — at 30 June 05 © « Top quartile total shareholder return « ROE of at least 1.5x WACC on normalised basis « Establishing an Asian foothold « Maintaining an 80:20 mix of short-tail: long-tail premium « Maintaining a ‘AA’ category rating 19 » During the year, we achieved pro
Slide 25: International expansion strategy update
International expansion strategy update © msn Arse > | would like to provide a little more detail on our international expansion strategy. As we have said on many occasions, we remain committed to continually improving the quality of our business in our home markets of Australia and New Zealand. Now
Slide 26: Outlook
Outlook 21 21
Slide 27: IAG's growth stronger than the market
) |IAG’s growth stronger than the market © IAG Domestic Growth v Market Growth 78.0% 65.0% Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 ‘wmon AnTUatised Growth (Market) ——-Annualised Growth {AG} Source: {AG & APRA Statistics 22 + This slide shows how IAG’s premium growth in Australia has exceeded that of the
Slide 28: Short-term outlook for FY06
Short-term outlook for FY06 * Goal for >2% organic premium growth (while market is expected to remain flat) + Insurance margin to moderate but should remain above the 13.5% margin generated in FY04 + Ongoing expense savings initiatives + Expect dividend growth of 10% + Surplus capital to be utilised
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