Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Presentation (June 2011)
15 slides from Insurance Australia's investor presentation, Jun 14, 2011
Slide 1: Investor Briefing
2011 INVESTOR BRIEFING 14 June 2011 ABN 60 090 739 923
Slide 2: Australia Intermediated (CGU): Accelerating growth in home markets
4 AUSTRALIA INTERMEDIATED (CGU) Accelerating growth in home markets PETER HARMER CHIEF EXECUTIVE OFFICER 30
Slide 3: Business Overview: Diverse Portfolio Mix
BUSINESS OVERVIEW DIVERSE PORTFOLIO MIX CGU • Large SME portfolio • 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 Consumer Commercial l
Slide 4: Business Overview: Diverse Distribution Footprint
BUSINESS OVERVIEW DIVERSE DISTRIBUTION FOOTPRINT CGU ~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 WA institutions & SA af
Slide 5: Current Market Environment: Pricing Remains Patchy
CURRENT MARKET ENVIRONMENT PRICING REMAINS PATCHY CGU 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 costs growing faster
Slide 6: Current Market Environment: A Changing Landscape
CURRENT MARKET ENVIRONMENT A CHANGING LANDSCAPE CGU • 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 & • Review and Inquir
Slide 7: Distribution: Technology Evolving to Drive Efficiencies
DISTRIBUTION TECHNOLOGY EVOLVING TO DRIVE EFFICIENCIES CGU • 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 process has not change
Slide 8: Our Achievements: Improved Performance Demonstrates Underlying Turnaround
OUR ACHIEVEMENTS IMPROVED PERFORMANCE DEMONSTRATES UNDERLYING TURNAROUND CGU 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 costs and credit spre
Slide 9: Our Achievements: Strategic Drivers Behind the Turnaround
OUR ACHIEVEMENTS STRATEGIC DRIVERS BEHIND THE TURNAROUND CGU 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 Business • Transformation
Slide 10: Focus for the Future: Leader in Intermediated Insurance
FOCUS FOR THE FUTURE LEADER IN INTERMEDIATED INSURANCE CGU 38
Slide 11: Strategic Themes: Channel Management
STRATEGIC THEMES CHANNEL MANAGEMENT CGU 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 segmentation structure,
Slide 12: Strategic Themes: Customer and Market Insights
STRATEGIC THEMES CUSTOMER AND MARKET INSIGHTS CGU 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 • Intermediaries • End customers Appl
Slide 13: Strategic Themes: Underwriting Expertise
STRATEGIC THEMES UNDERWRITING EXPERTISE CGU Managing latent & Strategic portfolio Underwriting rigour Pricing discipline emerging risks management & risk selection UNDERWRITING EXPERTISE Portfolio Portfolio strategy Underwriting Underwriting Reinsurance performance & planning framework competence st
Slide 14: Focus for the Future: Clear Priorities
FOCUS FOR THE FUTURE CLEAR PRIORITIES CGU 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 reductions: Solid platfor
Slide 15: Outlook: Further Improvement Expected
OUTLOOK FURTHER IMPROVEMENT EXPECTED CGU 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 environment on premium trends •
Insurance Australia Group — Investor Presentation (June 2011) on 6ix