Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Shareholder Meeting (November 2003)
29 slides from Insurance Australia's shareholder meeting presentation, Nov 12, 2003
Slide 1: ASX cover letter: Annual General Meeting
insurance Australia Group Limited ABN 60 090 739 923 388 George Street Sydney NSW 2000 Telephone 02 9292 9222 iag.com.au 12 November 2003 Ms Pam Ross Manager, Company Announcements Office Australian Stock Exchange Limited Level 4, Exchange Centre IAG 20 Bridge Street SYDNEY NSW 2000 ounce ‘Group Dea
Slide 2: Address by Mr James Strong, Chairman
Address by Mr James Strong, Chairman Insurance Australia Group Limited 2003 Annual General Meeting 12 November 2003 The main purpose of my address as Chairman today is to provide a brief overview of the past financial year and to comment on other significant events. | will ask Michael Hawker as CEO
Slide 3: Group performance and board strategy
Less than ten years ago, we offered three products. Now, we are fully diversified by product, geography and distribution channel, with one of the tegion’s highest financial strength ratings for an insurance company from Standard & Poor's. Group Performance In terms of ongoing business, the whole Gro
Slide 4: Dividends and commitment to sound governance
Dividends Last month we paid ordinary shareholders a final dividend of seven cents per share. This brings our total annual dividend to 11.5 cents per ordinary share — which is 9.5 per cent higher than the previous year. The Board will continue to consider carefully future dividend policy to ensure t
Slide 5: Retirement benefits scheme and Board remuneration
The Board decided to freeze the operation of the retirement benefits scheme for non-executive Directors from 1 September this year. There will be no future accrual of benefits on the basis of service, and the scheme will phase out, as it will not apply to new Directors. We also took specialist exter
Slide 6: Board size and future priorities
Following the retirement of Maree and Mary, the Board decided to reduce its size to eight Directors, being seven non-executives plus the Chief Executive as Managing Director. All your non-executive directors meet the criteria of being independent directors. Future Priorities As | said earlier, this
Slide 7: Annual General Meeting
Annual General Meet __ Michael Hawker, Chief Ex 42 November 2003 Insaran ABN 80 090 759.925 noe Australia Group Linwlsd
Slide 8: Agenda
Agenda * Insurance - our role * Year in review * Looking forward ae lin Group Limited 922,
Slide 9: Insurance - our role
Insurance - our role Our customers and the community expect us to: . Pay claims . Price risk . Minimise cost . ‘HELP’ reduce risk The economics of the business are driven by scale up inte Ce ee cee Insurance is the ultimate community product. People pool money with us so that, if an individual suffe
Slide 10: Year in review
Year in review , rrance Auta Grow Lint EOE, a4 ABN 60 090 739 922 4 This has been a watershed year for Insurance Australia Group. Our achievements have been numerous, in relation to our customers, our people, our shareholders and the communities in which we operate.
Slide 11: Customers: improved experience
w x ¥ Customers: improved experience t General insurance policies in force atitl PYgS FYOG FYOt FYOZ FYO3 N i 3 Ss milfions > aD & & + Renewal rates sustained c.90% in all major products + Australian policies in force grew by 5% in FY03 + Claims satisfaction close to 90% and complaints on claims lod
Slide 12: Customers: improving how we HELP
Customers: improving how we HELP © IAG * Getting it Right programme, launched in 2002, to improve the customer experience * 1,500 people involved across the Group * 1,300 ideas generated + More than 400 initiatives now being implemented progressively noe Auslafia Group Limes . zs 729.923 sac “a 6 Th
Slide 13: Community: focus on environment
Community: focus on environment © IAG Global Average Near Surface Temperatures Economic losses from Australian natural Annual anomalies, 1860 - June 2003 disasters greater than $19m 7 Tall CRUE IR MONOID ABER UREA nish LP ELS EE OE LES LE DL + Global temperatures have increased + Economic losses fro
Slide 14: Community: safety and risk reduction
Community: safety and risk reduction © 1AG —_— CrimeSate an tig Seg e. — insurance Ausiralia Group inte Biss... ioe ABN 09 090 730 92% e We have aligned our philanthropic and sponsorship efforts with other organisations that HELP our customers and who are also looking to reduce risk in the community
Slide 15: People: talent management matrix
People: talent management matrix © 1G sare Performance —_— Management capacity Specialist pep Ss, " 8 a ail ay rrance Auta Grow Lint Ll ABN 60 090 739 922 9 I'd like to spend some time talking you through our talent management matrix, which is the cornerstone of our evaluation and development proces
Slide 16: People: focus on engagement
People: focus on engagement © 1G Six measures of engagement: * It would take a fot to get me to leave this organisation | would not hesitate to recommend this organisation to a friend seeking employment This organisation inspires me to do my best work every day | hardly ever think about leaving this
Slide 17: People: setting the ground rules
People: setting the ground rules Honesty Meritocracy. Teamwork Social responsibility Transparency AM “Culture “To create actions hat support people development & a high erformance culture’ inane, ae Ce ee cee We are fortunate in that the cultures within [AG are supportive of the “help” branding camp
Slide 18: Investors: growth in business & profit
Investors: growth in business & profit © 1AG BPE Insurance profit (pre-tax) Revenue has continued to grow with the CGU & NZI - acquisition contributing 400 most of the 2003 growth & 300 200 100 Gross written premium ° FY99 FYOO FYO1 FY02 FYOs Financial year Insurance profitability has also grown to
Slide 19: Investors: CGU/NZI on track
Investors: CGU/NZI on track CGUINZI insurance result Actual Business case Gross written premium ASI291m- A$1,125m Net earned premium AS1,023m_ AS$S72m Combined ratio : 98.3% Contribution to group NPBT' AS : na ' Stated after allowing for goodwill amortisation, integration expenses and borrowing cost
Slide 20: Investors: key ratios - margins up
Investors: key ratios ~ margins up Expense ratio Loss ratio {and commission ratio for FYO4 - FYO3) Sonibined ratio. Inserance margin efore tax} rr er ee i A en cae a) bef ABN 80 090 739 925 Insurance Australia Group Linwlse 14 In recent years we have simply noted that the trends on this slide are al
Slide 21: Investors: FY03 financial results
Investors: FY03 financial results overview FY 2004 Net premium revenue Underwriting profiti{loss} » _ Investment income on technical reserves insurance profit » — lavestment income/{ioss) on shareholders’ funds Amortisation’& interest Other items (net) Profit before income tax Income tax (expense)/b
Slide 22: Investors: increased dividends
Investors: increased dividends © IAG . Normalised earnings up 8% to $343m . Total dividend for FY03 of 11.5c per ordinary share ~ Up 9.5% from last year . Dividend reinvestment plan (‘DRP’) introduced: — Strong take-up by more than 200,000 shareholders Dividend policy under review te, , a . g cup, ¥
Slide 23: Investors: strongly capitalised
Investors: strongly capitalised © 1AG Approach to capital unchanged — Risk of ruin of 1 in 750 years - An‘AA' category rating — currently AA (Outlook stable) — Group MCR multiple in 1.35x — 1.65x range + Strengthened risk margins in claims reserves and maintained minimum probability of sufficiency o
Slide 24: Investors: record share price
Investors: record share price IAG Sharo Price Porformance Insurance Australia Group timeted ABN 60 290 739-922 3B 18
Slide 25: Award-winning performance
Award-winning performance . General Insurance Company of the Year in Asia - Asia Insurance Awards . Best non-bank financial institution and best banking & finance promotion - Australia Banking & Finance Magazine Awards Won Secondary Equity Deal of the Year - CFO Magazine Ranked 11th - Reputex 2003 I
Slide 26: Summary: year in review
Summary: year in review © ING . Improved levels of new business and customer retention . Increased focus on the Group’s role in the community & environment . Development of our people and culture to provide long-term value for the Group . Completed acquisition of CGU and NZI, and integration is prog
Slide 27: Looking forward
Looking forward Ce ee cee up inte a After the transformation of the past year, how do we look as a company and how are we positioned for the future? 21
Slide 28: Performance to September 2003
Performance to 30 September 2003 « FY04 YTD September [Pix Target Scorecard | Achieved | Achieved sirance margin (pretax) AQ TR Achieved © + Equity markets have been positive - S&P/ASX200 up 4.71%, MSCI World (ex Aust) up 3.85% + On track for full year, barring any major insured events. Ahead in fir
Slide 29: Our strategic focus over time
Our strategic focus over time © A Progressing this will depend on being able to show internationally applicable core competencies ———> Progress We believe that there are substantial opportunities locally June 2003 for a few years «— Delivered Time > wii cmate soto gage ese oe Gaines vavetene se 2 In
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