Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Shareholder Meeting (October 2010)
18 slides from Insurance Australia's shareholder meeting presentation, Oct 27, 2010
Slide 1: Annual General Meeting 2010
For personal use only ANNUAL GENERAL MEETING 2010 Michael Wilkins Managing Director & Chief Executive Officer 27 October 2010
Slide 2: Group Performance
For personal use only 1 GROUP PERFORMANCE
Slide 3: FY10 Financial Performance
FY10 FINANCIAL PERFORMANCE For personal use only IMPROVEMENT IN HOME MARKETS; ADVERSE SECOND HALF EVENTS 7,842 7 782 7,782 7.1 181 7.0 91 09 10 09 10 09 10 GROSS WRITTEN INSURANCE NET PROFIT PREMIUM ($M) MARGIN (%) AFTER TAX ($M) PAGE 3
Slide 4: FY10 Insurance Margin
FY10 INSURANCE MARGIN For personal use only CLEAR OPERATIONAL IMPROVEMENT DELIVERED 600 580 560 540 7 1% 7.1% 12 38 520 13 53 7.0% 500 480 460 440 420 400 367 380 313 360 340 320 300 515 493 280 260 240 220 46 200 180 160 140 120 100 FY09 Reserve Releases Natural Perils DAC/LAT UK Charge Credit Spre
Slide 5: Divisional Results
DIVISIONAL RESULTS For personal use only HOME MARKETS IMPROVED UNITED KINGDOM ASIA AUSTRALIA DIRECT NEW ZEALAND 1 IAG FY10 GWP BY REGION 2 4 AUSTRALIA 3 INTERMEDIATED Australia (76%) ONLINE New Zealand (12%) UK (9%) 5 Asia (3%) PAGE 5 1 49% ownership of the general insurance arm of AmBank Group, AmG
Slide 6: Australia and New Zealand
AUSTRALIA AND NEW ZEALAND For personal use only IMPROVEMENT IN HOME MARKETS AUSTRALIA DIRECT NEW ZEALAND • Collective insurance margin improved significantly from 6.8% up to 13.2% • Australia: − Strong GWP and insurance profit growth from Direct − Improved insurance margin from CGU AUSTRALIA INTERME
Slide 7: Asia
ASIA For personal use only ESTABLISHED BUSINESSES PERFORMING WELL ASIA • Strong operational performances in established businesses in Thailand and Malaysia, ahead of their markets • Completed Indian general insurance joint venture; commenced writing new business • Continued to pursue growth opportun
Slide 8: United Kingdom
UNITED KINGDOM For personal use only SIGNIFICANT RESERVE STRENGTHENING UNITED KINGDOM • Strengthened claims reserves and reinsurance protections in response to rising bodily injury claims affecting the UK motor insurance industry • Recorded a substantial loss due to associated one-off $367m charge •
Slide 9: Capital, Dividend and Investments
2 For personal use only CAPITAL DIVIDEND AND CAPITAL, INVESTMENTS
Slide 10: IAG Remains Well Capitalised
IAG REMAINS WELL CAPITALISED For personal use only BALANCE SHEET REMAINS STRONG; FULL YEAR DIVIDEND UP 30% 4 140 4,140 1 92 1.92 13 3,573 1.79 10 09 10 09 10 09 10 TOTAL MINIMUM CAPITAL TOTAL REGULATORY REQUIREMENT DIVIDENDS CAPITAL ($M) (MULTIPLE) (CPS) PAGE 10
Slide 11: Conservative and High Credit Quality Investment Mix
CONSERVATIVE AND HIGH CREDIT QUALITY INVESTMENT MIX For personal use only SOUND INVESTMENT RETURNS 780 96 10% 554 Fixed Interest and Cash Growth 90% 10 09 Fixed interest and cash (90%) Growth (10%) 09 10 (39) $11.7B INVESTMENT TECHNICAL SHAREHOLDERS’ PORTFOLIO ASSET RESERVE FUNDS RETURNS ALLOCATION
Slide 12: Business Sustainability Performance
3 For personal use only BUSINESS SUSTAINABILITY PERFORMANCE
Slide 13: Sustainability Performance Remained Strong
SUSTAINABILITY PERFORMANCE REMAINED STRONG For personal use only DESPITE DIFFICULT INTERNAL AND EXTERNAL FACTORS EMPLOYEE CUSTOMER ENGAGEMENT 80% SATISFACTION 84 Direct personal lines customer Exceeded global financial satisfaction index level with the services companies’ benchmark previous year COM
Slide 14: Outlook
For personal use only 4 OUTLOOK
Slide 15: Sound First Quarter Performance
SOUND FIRST QUARTER PERFORMANCE For personal use only ROBUST REINSURANCE PROGRAM LIMITS NATURAL PERIL COSTS • Solid 1Q performance, driven by home territories of Australia and New Zealand • Significant natural peril activity, covered by the Group’s reinsurance arrangements: – Storms and flooding acr
Slide 16: FY11 Guidance Reaffirmed
FY11 GUIDANCE REAFFIRMED For personal use only IMPROVED PERFORMANCE EXPECTED On track to deliver FY11 guidance: FY11 Insurance margin 10.5-12.5% Underlying GWP growth 3-5% Guidance for FY11 assumes: • Losses from natural perils in line with budgeted allowances of $435m • No material movement in fore
Slide 17: Two Years into a Three Year Corporate Strategy
TWO YEARS INTO A THREE YEAR CORPORATE STRATEGY For personal use only STAYING THE COURSE IN FY11 • ROE ≥ 1.5x 1 5x WACC OUR • Top quartile TSR • Deliver a strong TARGETS • Secure position in chosen performance in Australia industry and classes and New Zealand OUR • Pursue selective general STRATEGIC
Slide 18: Business Model and Brands
BUSINESS MODEL AND BRANDS For personal use only DIRECT INTERMEDIATED ONLINE DIRECT DIRECT INTERMEDIATED INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE 2 3 4 DOM NEW ZEALAND NITED KINGD 5 AUSTRALIA A ASIA INTERMEDIATED INTERMEDIATED INSURANCE INSURANCE UN N OTHER 1 ACTIVE PORTFOLIO MANAG
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