Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Shareholder Meeting (November 2006)
24 slides from Insurance Australia's shareholder meeting presentation, Nov 15, 2006
Slide 1: Annual General Meeting 2006
Annual General Meeting 2006 Michael Hawker Chief Executive Officer 15 November 2006 Insurance Australia Group Limited ABN 60 090 739 923
Slide 2: Year in Review
Year in Review Insurance Australia Group Limited ABN 60 090 739 923
Slide 3: Momentum in Personal Insurance
Momentum in Personal Insurance NSW Car Com prehensive Adjusted Weekly Due Renewal Rate 95.0% W eek ending 94.0% 17/09/2006 Weekly Renewal Rate 93.0% 92.0% 91.0% 90.0% 89.0% 88.0% 87.0% 86.0% 16 19 12 29 27 06 21 06 29 23 -J -S -D -M -J -M -A -N -J -A ul un an e ec ug pr ay ov ar -0 p- -0 -0 -0 -0 -0
Slide 4: Cyclone Larry & NZ snow storm
Cyclone Larry & NZ snow storm Insurance Australia Group Limited ABN 60 090 739 923
Slide 5: Established a presence in Asia
Established a presence in Asia 1 2 1. This logo is the property of China Pacific Property Insurance (CPPI). IAG is seeking to acquire 24.9% of CPPI; the transaction is not yet complete. 2. IAG owns 30% of AmAssurance. As at 15 November 2006. Insurance Australia Group Limited ABN 60 090 739 923
Slide 6: Award winning performance
Award winning performance WINNER General Insurance Company of the Year Australia and New Zealand Insurance Industry Awards WINNER Triple Bottom Line Award World Environment Day Awards, United Nations (Australia) WINNER Underwriter of the Year – NZI Insurance Brokers’ Association of New Zealand Award
Slide 7: 2006 Results
2006 Results • Net profit after tax of $759 million • Second highest ROE and insurance margin • Dividend of 29.5 cents per share fully franked – Up 11.3% on FY05 • Special dividend 12.5 cents per share fully franked – Returned $200 million to shareholders For the year ended 30 June. Insurance Austra
Slide 8: GWP: four year growth 15.5%pa
GWP: four year growth 15.5%pa Gross Written Premium by line of business % premium written outside NSW/ACT 56% 57% 57% 51% 40% 42% Growth and % $6.7bn $6.5bn* o $6.4bn $6.4bn diversification f 3% 3% 10% 4% 5% 1% achieved 11% 7% 10% 10% 6% 6% 4% $5.2bn 4% 22% 12% 21% 20% 20% 5% $3.6bn 4% 4% 4% 3% 15%
Slide 9: Profit: four year normalised growth 15.3%pa
Profit: four year normalised growth 15.3%pa 781 759 $m 800 Normalised profit four year growth rate 15.3%pa 636 601 600 Actual four year growth rate 39.6%pa 542 434 400 360 307 200 132 -25 0 FY02 FY03 FY04 FY05 FY06 Normalised NPAT to ordinary shareholders Actual NPAT to ordinary shareholders -200 Fo
Slide 10: ROE: four year average 15.7%
ROE: four year average 15.7% 24.5% 25% 22.1% 21.1% 20% 18.8% Normalised ROE 13.9% 14.4% 15.8% four year average 15% 15.7% 10% 5.1% 5% 0% FY03 FY04 FY05 FY06 ROE (Normalised) attributable to holders of ordinary shares ROE (Actual) attributable to holders of ordinary shares For the year ended 30 June.
Slide 11: Dividends: four year growth 29.5%pa
Dividends: four year growth 29.5%pa Dividends per share 50.0 60.0 42.0 40.0 50.0 Ordinary dividends four year growth rate 12.5 29.5%pa Cents per share 40.0 30.0 20.0 29.5 26.5 10.0 22.0 10.5 11.5 0.0 FY02 FY03 FY04 FY05 FY06 For the year ended 30 June. Dividends per share Special dividend Insurance
Slide 12: Australian general insurance cycles
Australian general insurance cycles Combined Operating Ratio Underwriting Profit 80% Combined Operating Ratio (%) 90% 100% 110% 120% 130% Underwriting Loss 140% 150% 160% FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 Year Ended June Personal lines Commercial Personal injury S
Slide 13: Our operations today
Our operations today 1 3 3 2 1. This logo is the property of China Pacific Property Insurance (CPPI). IAG is seeking to acquire 24.9% of CPPI; the transaction is not yet complete. 2. IAG distributes products through RACV. 3. These logos are the property of IAG’s joint venture subsidiaries. Insurance
Slide 14: Customer measures strong
Customer measures strong Health of retail brands remains strong in Australian direct Claims satisfaction remains strong in Australian direct personal lines personal lines Brand Health (Direct Personal Lines) Claims Satisfaction Level (Direct Personal Lines) 60 95 55 50 45 90 40 35 85 30 Base Jan - J
Slide 15: Employee engagement
Employee engagement 40% 60% Stable 25% Serious Zone Zone High Performance Zone Critical Zone 0% 100% Employee Engagement Score: IAG Australia Year 2003 2004 2005 2006 Score 45% 53% 54% 56% Insurance Australia Group Limited ABN 60 090 739 923
Slide 16: IT costs down, effectiveness up
IT costs down, effectiveness up IT Costs Priority 1 Outages 350 400 330 * 323 300 313 200 $m 300 280 278 100 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY04 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 FY06 250 Oct03- Jan04- Apr04- July04- Oct04- Jan05- Apr05- Jul05- Oct05- Jan06- Apr06- Dec03 Mar04 Jun04 S
Slide 17: Our sustainability report
Our sustainability report Insurance Australia Group Limited ABN 60 090 739 923
Slide 18: Outlook
Outlook Insurance Australia Group Limited ABN 60 090 739 923
Slide 19: Sales conversions trending up
Sales conversions trending up Australian Direct Personal Lines National Sales Conversion Rates for Telephone Call Centres 50% 48% 46% Sales Conversion Rate (%) 44% 42% 40% 38% 36% 34% 32% 30% Jul-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 May-05 Jun-05 Jul-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar
Slide 20: First three months of this financial year
First three months of this financial year • Performance in line with our guidance • Continuing momentum in personal lines – Renewal rates at highest level in two years – Marketing initiatives well received by customers – Improving conversion rates on new business • Commercial lines GWP in line with
Slide 21: Outlook: year ending June 2007
Outlook: year ending 30 June 2007 Outlook firmed from full year announcement • Generate GWP growth of 8 – 10% – GWP growth in first six months 3 - 5% on 1H06 • Further shareholder accretive acquisitions in the pipeline • Deliver normalised ROE above 15% Subject to no large losses or catastrophes bey
Slide 22: Strategy remains on track
Strategy remains on track Generation of Progress international growth and profitability Generation of Delivered domestic organic growth and Today profitability Generation of domestic scale Time 1998 2003 2004 2005 2006 …2012 Insurance Australia Group Limited ABN 60 090 739 923
Slide 23: IAG share performance
IAG share performance IAG share performance - since listing 300.00 S&P/ASX All Ordina rie s Accum ula tion Inde x S&P/ASX 100 Accum ula tion Inde x 250.00 IAG Sha re Price including Re inve stm e nt of Divide nds 200.00 150.00 100.00 Note: 50.00 Dividends are assumed to be reinvested us ing the clos
Slide 24: Annual General Meeting 2006
Annual General Meeting 2006 Insurance Australia Group Limited ABN 60 090 739 923
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