Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Day (December 2024)
63 slides from Insurance Australia's investor day presentation, Dec 3, 2024
Slide 1: ASX Release: IAG Investor Day 2024
ASX Release 3 December 2024 IAG Investor Day 2024 IAG will today host an Investor Day providing an overview of strategic, operational and financial progress. IAG Managing Director and CEO Nick Hawkins, with members of the executive leadership team, will update investors on IAG’s strategic progress.
Slide 2: Investor Day 3 December 2024
For personal use only Investor Day 3 December 2024
Slide 3: Important information
Important information This presentation contains general information current as at 3 December 2024 (unless otherwise stated) natural peril events causing losses to exceed forecasts, and uncertainties in the Australian and global and is not a recommendation or advice in relation to any product or ser
Slide 4: Introduction – Nick Hawkins
For personal use only Nick Hawkins Chief Executive Officer Introduction Investor Day 3 December 2024 3
Slide 5: Acknowledgement of Country
Acknowledgement of Country For personal use only IAG acknowledges Traditional Owners of Country throughout Australia and recognises the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures; and to Elders past and present. We sho
Slide 6: Agenda
Agenda 9.00 Introduction Nick Hawkins 9.15 Technology Neil Morgan For personal use only 9.25 Retail Insurance Australia Julie Batch 9.40 Intermediated Insurance Australia Jarrod Hill 9.55 New Zealand Amanda Whiting 10.10 Breakout Sessions Showcase 1: Reinvigorating Customer Experience Showcase 2: In
Slide 7: Well positioned to serve more customers across Australia and New Zealand
Well positioned to serve more customers across Australia and New Zealand For personal use only Compelling purpose Strategic focus We make your world a safer place A stronger and more resilient IAG Operational progress Financial results Delivering with discipline Consistent, reliable performance Inve
Slide 8: A stronger, more resilient IAG
A stronger, more resilient IAG Strategic focus For personal use only Grow with our customers • Protecting customers in Australia and New Zealand • Clear brand strategy Build better businesses • Reinsurance protections reduce volatility Create value through digital • Risk maturity uplift • Technology
Slide 9: Delivering with discipline
Delivering with discipline Operational progress For personal use only • Experienced, stable leadership team • Employee engagement +78 7.8 million retail customers • 7.8 million retail customers • Strong customer NPS AU: +46.8 • NRMA Insurance, Australia’s most trusted insurance brand NZ: +50.0 Custo
Slide 10: Consistent, reliable performance
Consistent, reliable performance Financial strength For personal use only Gross Written Premium $16.4bn • GWP up 35% over the past four years $12.1bn ▲ 35% • Capital requirements stable • Perils allowance has doubled (FY20: $641m, FY25: $1,283m) FY20 FY24 • Reinsurance costs ex-quota share up 50% (F
Slide 11: Australia and New Zealand remain attractive markets for growth
Australia and New Zealand remain attractive markets for growth Population (m) Motor Vehicles (m) Dwellings (m) Business Counts (m) For personal use only +2.3 +2.4 +1.0 +0.3 35.4 28.2 14.4 3.5 33.1 13.4 3.3 25.8 New 5.8 5.3 2.3 0.6 5.4 New New 2.1 New 0.6 Zealand 4.7 Zealand Zealand Zealand 6.1 Other
Slide 12: Our markets are estimated to be ~$115 billion in FY30
Our markets are estimated to be ~$115 billion in FY30 General Insurance Industry GWP (A$bn) For personal use only Australia New Zealand FY24-30 FY24-30 ~100 ~15 CAGR CAGR ~6% ~6% 73 10 2 20 43 6 3 19 Motor and 13 Motor 1 CTP Home and 2 Home and 12 Other 34 5 Other 18 Commercial 3 Commercial FY18 FY2
Slide 13: Clear and consistent IAG strategy
Clear and consistent IAG strategy People Purpose Strategy Our people are the difference: bringing our We make your world a safer place Create a stronger, more resilient IAG purpose to life and delivering our strategy For personal use only Focus Approach Ambitions1 Targets1 Grow with our Deliver outs
Slide 14: Evaluating inorganic growth opportunities
Evaluating inorganic growth opportunities For personal use only Strategic fit IAG’s partner offering Financial outcomes • Australia and New Zealand • Purpose-led customer focus Consistent with IAG’s capital allocation framework and deliver ‘through the • Retail insurance preference • Modern, impleme
Slide 15: IAG is well positioned for growth now and into the future
IAG is well positioned for growth now and into the future For personal use only Scalable business set to expand beyond our Improving efficiency 7.8m customers and margin Direct Partner Intermediated Australia New Zealand Australia New Zealand Australia New Zealand Efficient Capital Platform Investor
Slide 16: Technology – Neil Morgan
For personal use only Neil Morgan Chief Operating Officer Technology Investor Day 3 December 2024 15
Slide 17: Foundations for growth
Foundations for growth 2025 2030 For personal use only Stream 2020 Today 1. Claims 2. Retail 3. Intermediated 4. Operations Indicative platform coverage AU Partners NZ Strategic Enterprise Platform (Retail) Commercial Enablement (Intermediated) Investor Day 3 December 2024 16
Slide 18: Retail – migrating at pace
Retail – migrating at pace FY22 FY23 FY24 FY25+ For personal use only ✓ ✓ ✓ ✓ ✓ NZ Partner & ASB STATE & AMI STATE & AMI BNZ STATE & AMI WESTPAC NZ Foundation Home & Landlord Motor Niche & CO-OP ✓ ✓ ✓ ✓ ✓ ✓ RIA Direct NRMA WEST 2 NRMA WEST 3 East NRMA EAST SA, ACT, NSW SWANN & RACV (HBF and CGU Dire
Slide 19: Retail – leveraging the core for growth
Retail – leveraging the core for growth Customer impact For personal use only Digital Channel Architecture Digital channel share : +10% motor & home Insurance Core Inclusive Innovation Quote to completion: +10% home products IAG’s Artificial Intelligence Platform +20% motor products Operational Plat
Slide 20: Intermediated – simplification on track
Intermediated – simplification on track Commercial Enablement For personal use only Broker Integration Layer ✓ Trans-Tasman scale ✓ Brokers’ partner of choice Insurance Core Inclusive Innovation ✓ Intelligent straight-through-processing IAG’s Artificial ✓ Granular, agile pricing Intelligence Platfor
Slide 21: Inclusive Innovation across IAG
Inclusive Innovation across IAG IAG’s Artificial Intelligence Platform Deploy Shape Compose For personal use only • Enterprise-wide scale • IAG’s bespoke GenAI bot-builder • 50 GenAI builders supporting • Creating value from simplification • Swift, cost-effective tool creation, scalable, transformat
Slide 22: Retail Insurance Australia – Julie Batch
For personal use only Julie Batch CEO, NRMA INSURANCE Retail Insurance Australia Investor Day 3 December 2024 21
Slide 23: Retail Insurance Australia (RIA) overview
Retail Insurance Australia (RIA) overview For personal use only Direct Brands Partner Brands1 Brand Product Motor /CTP Home SME Niche FY24 GWP ~$8.3b NRMA awarded Most Trusted NRMA ranked 2nd strongest ~1.2m2 Partner Customer Over 5m Direct Insurance Brand three years brand in Australia & 25th most
Slide 24: Our journey so far
Our journey so far 2020-21 2021-22 2022-23 2023-24 For personal use only Growth Simplifying Launching a Focusing on Maintaining journey our business national brand customer growth financial strength 5.0 5.0 4.8 Customer 4.7 evolution (m) FY21A FY22A FY23A FY24A Milestones Rationalisation & 69% natio
Slide 25: Operating environment
Operating environment For personal use only Macro themes Insurance landscape Customer dynamics • Positive growth outlook1: Competitive dynamics will • Increased shopping behaviour - population (~1.4% p.a.); Motor continue to evolve: more opportunities to capture in- vehicles (~1.7% p.a.); dwellings
Slide 26: RIA strategy
RIA strategy For personal use only Vision: ‘A HELP Company’ Exceptional Brands & Australian-Made Moving Faster Than Partnerships Scale Anyone Else Investor Day 3 December 2024 25
Slide 27: Exceptional brands
Exceptional brands Fast Intuitive Help Personal to Needs Channel of Choice For personal use only ‘Delivering today’ >90% Retention for customers with >10 years tenure Improved pre-fill forms and insurance recommendations Optimised Website to improve CX/SEO +10% Improvement in quote completion rate P
Slide 28: Exceptional partnerships
Exceptional partnerships Phase 1. Review Phase 2. Transform For personal use only Align current partners with Retail strategy: Pursue new partnerships aligned with customer ethos: motoring clubs and OEMs (to access motor); mutuals and • Support transition to scalable opportunities financial institut
Slide 29: Australian-made scale
Australian-made scale Pricing Excellence Product Evolution Leading Claims Model For personal use only ‘Delivering today’ ~2m Customers ‘live’ on Enterprise Platform Simpler Product suite for scale and efficiency >$100m Value through supply chain optimisation (all NRMA Home/Motor) Improved risk estim
Slide 30: Moving faster than anyone else
Moving faster than anyone else Digital engagement Faster decisioning Quicker Adaptability For personal use only ‘Delivering today’ 50% Interactions through digital channels 80% Accuracy for repair allocations Modernisation of Technology through EP/Earnix >30% Claims lodged digitally 40% Improvement
Slide 31: Vision: 'A HELP Company'
Vision: ‘A HELP Company’ For personal use only Exceptional Brands & Partnerships Australian-Made Scale Moving Faster Than Anyone Else Investor Day 3 December 2024 30
Slide 32: Intermediated Insurance Australia – Jarrod Hill
For personal use only Jarrod Hill CEO, CGU & WFI Intermediated Insurance Australia Investor Day 3 December 2024 31
Slide 33: Intermediated Insurance Australia (IIA) overview
Intermediated Insurance Australia (IIA) overview Product SME, Agri and Personal Lines Commercial and Corporate For personal use only Brands FY24 GWP $3.0bn $1.3bn Key Partners Investor Day 3 December 2024 32
Slide 34: Our journey so far
Our journey so far Turnaround Setting up a dedicated Horizon 1 – Launch of Ambition26 Portfolio optimisation and improved Horizon 1 complete: >$250m target journey Intermediated business strategy Pricing sophistication delivered For personal use only 2020-21 2021-22 2022-23 2023-24 328 209 Insurance
Slide 35: Track record of success
Track record of success Workers’ Comp Property ISR Property Claims WFI Growth For personal use only • Ongoing growth & partnership • Profitable and within risk • Process re-design • Investment in pricing opportunities appetite sophistication • Improved claims segmentation • Consistent underwriting •
Slide 36: Operating environment
Operating environment For personal use only Broker landscape Insurance landscape Customer dynamics • Broker consolidation and M&A activity • Market rate environment in transition • Consumers increasingly focused on likely to continue. following an extended period of rate value particularly in Person
Slide 37: IIA strategy and objectives
IIA strategy and objectives For personal use only Vision: Australia’s leading Intermediated Insurer 1. Digitally enabled, AI enhanced Platform 2. Tailored proposition for brokers and business (SME, Agri, Personal Lines) customers in our Underwritten Lines 3. Insurance you can shake hands with 4. Mar
Slide 38: Digitally enabled, AI enhanced Platform business
1. Digitally enabled, AI enhanced Platform business (SME, Agri, Personal Lines) Digital Service Product For personal use only Straight through Business Development 65% processing in >2,000 meetings per annum 68 Product variation count SME products with brokers ‘Delivering today’ SME, Personal Lines
Slide 39: Tailored proposition for brokers and customers in Underwritten Lines
2. Tailored proposition for brokers and customers in our Underwritten Lines For personal use only $50m ISR new business target in FY25 Leading Brokers NPS Continue to build our presence in the mid-market & Match broker service needs through a differentiated corporate segment via a responsive underwr
Slide 40: Insurance you can shake hands with
3. Insurance you can shake hands with Productivity Growth & Partners Customers and Sales reps For personal use only Amount of total GWP Community based 16% Admin Expense Ratio 4% written from New 150 Sales Representatives Business ‘Delivering today’ Contribution of referral Customer visits 52 NPS 40
Slide 41: Market leading claims
4. Market leading claims +50 NPS Reduced Claims Handling Expenses For personal use only Deploy digital tools and enhance our service model to Leverage emerging technology capabilities to deliver reduce duration and deliver a better service a scalable claims proposition, improve accuracy and experien
Slide 42: Vision: Australia's leading Intermediated Insurer
Vision: Australia’s leading Intermediated Insurer For personal use only Market share stabilised as Leading commercial underwriter with >5 Re-building our commercial business transforms to FY27 points broker NPS lead over nearest insurance presence in targeted competitor segments to drive growth Tail
Slide 43: New Zealand – Amanda Whiting
For personal use only Amanda Whiting CEO, IAG NZ New Zealand Investor Day 3 December 2024 42
Slide 44: New Zealand Overview
New Zealand Overview Retail Broker/Intermediated For personal use only Channel Direct Brands Bank Partners Via Brokers Brands Products Personal & Commercial Motor and Property, Motor, Home, Contents, SME Motor, Home, Contents , SME Liability, Marine, C&E GWP FY24 $1.6bn $0.6bn $1.9bn Connected ecosy
Slide 45: Our journey so far
Our journey so far 2021-22 2022-23 2023-24 2024-25 New Zealand For personal use only Early development of Major event response - Transformation Gaining momentum Journey Connected ecosystem #2 and #3 largest in NZ delivery underway and results 4.1 ~4.2 3.2 3.6 GWP(NZ$bn) FY22A FY23A FY24A FY25F Growi
Slide 46: Operating environment
Operating environment For personal use only Macro themes Insurance landscape Customer dynamics • Positive system growth to 2030 • Increased presence of offshore • Rise in Digital Natives capital contributing to a softer • Cost of living pressures persist market • Expectations of real-time, on-demand
Slide 47: New Zealand strategy
New Zealand strategy For personal use only Vision: A Connected Customer Business 1. Distinct Brand Propositions (AMI and State) 2. Building a Connected Ecosystem 3. NZI is Brokers’ Partner of Choice 4. NZ Transformation Investor Day 3 December 2024 46
Slide 48: Distinct Brand Propositions (AMI and State)
1. Distinct Brand Propositions (AMI and State) For personal use only Personalised service Digital efficiency More complex needs Simpler needs The most trusted brand for high-value coverage, offering Sharply priced insurance that is simple to understand, buy, proactive and personalised service and pr
Slide 49: Building a Connected Ecosystem
2. Building a Connected Ecosystem Amplify further For personal use only • Expand geographic footprint and breadth of services • Increase growth of insurance and non-insurance customers • Optimising the mobile app experience • Build partnerships where it makes sense Strategic Rationale • Grow relatio
Slide 50: NZI is Brokers' Partner of Choice
3. NZI is Brokers’ Partner of Choice For personal use only Delivering today Transforming tomorrow Growth with our customers and partners through Modernise technology platforms, data and AI leading experience and expanded assurance solutions capability, and digital connectivity with brokers Underpinn
Slide 51: NZ Transformation
4. NZ Transformation Pricing Uplift Claims Segmentation Data and AI For personal use only • Granular risk assessment • Faster claim closure • Faster insights-to-action loop • Higher customer acquisition & retention • Improved customer satisfaction • Personalised customer experience • Enhanced monito
Slide 52: New Zealand Vision
New Zealand Vision Retail Broker / Intermediated For personal use only Connect and Data for Grow GWP Build customer grow our personalised, with strong value and expand customer proactive customer underwriting assurance base engagements discipline propositions Digitise and build a Digitally transform
Slide 53: Capital and Financials – William McDonnell
For personal use only William McDonnell Chief Financial Officer Capital and Financials Investor Day 3 December 2024 52
Slide 54: Strong capital foundations
Strong capital foundations Capital Approach Outcomes For personal use only • Strong capital targets materially above • Risk-based and disciplined allocation of • Comprehensive reinsurance program • ~$587m of surplus capital returned via regulatory requirements capital: with multiple components on-ma
Slide 55: Strategic capital allocation: continuing the capital light journey
Strategic capital allocation: Continuing the low volatility / ‘capital light’ journey Divisional earnings volatility Ongoing focus on reducing earnings volatility For personal use only • Future opportunities to reduce volatility based on the material risk drivers • Intermediated Insurance Australia
Slide 56: RACQ acquisition from surplus capital
RACQ acquisition from surplus capital Pro-forma capital position For personal use only 0.05 (0.01) 1.12 Pro-forma capital does not reflect benefit of positive year- 0.9 bottom end of (0.21) 0.95 to-date earnings. Future CET1 target range tailwinds from tax loss utilisation and potential release from
Slide 57: Productivity and efficiency
Productivity and efficiency Gross operating costs expected to increase with: For personal use only • Additional technology expenses Administration expense ex-levies ratio (%) • Amortisation of capitalised software . . Partially offset by: • Automation and process optimisation • Operating model simpl
Slide 58: FY25 guidance reaffirmed
FY25 guidance reaffirmed1 FY25 financial trends For personal use only GWP growth of ‘mid-to-high single digit’ Premium rate increases Inflation trends stable or Reported insurance profit cover inflation moderating of $1,400m to $1,600m Reported insurance margin of 13.5-15.5% Retention rates remain s
Slide 59: Q&A session
For personal use only Q&A session Investor Day 3 December 2024 58
Slide 60: Conclusion – Nick Hawkins
For personal use only Nick Hawkins Chief Executive Officer Conclusion Investor Day 3 December 2024 59
Slide 61: IAG is well positioned for growth now and into the future
IAG is well positioned for growth now and into the future For personal use only Scalable business set to expand beyond our Improving efficiency 7.8m customers and margin Direct Partner Intermediated Australia New Zealand Australia New Zealand Australia New Zealand Efficient Capital Platform Investor
Slide 62: Investor Relations
For personal use only Investor Relations Mark Ley Nigel Menezes Mobile. +61 (0)411 139 134 Mobile. +61 (0)411 012 690 Email. mark.ley@iag.com.au Email. nigel.menezes@iag.com.au Media Amanda Wallace Mobile. +61 (0)422 379 964 Email. amanda.wallace@iag.com.au Insurance Australia Group Limited ABN 60 0
Slide 63: Appendix: FY25 Guidance and Outlook
Appendix 1 FY25 Guidance IAG’s confidence in its underlying business is reflected in guidance for FY25 which includes: and Outlook • GWP growth of ‘mid-to-high single digit’. This assumes premium increases to cover ongoing claims inflation and the increased natural perils allowance combined with dir
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