Insurance Australia Group Ltd · ASX:IAG

Insurance Australia — Citigroup Australia & New Zealand Investment Conference 2005

21 slides from Insurance Australia's conference presentation, Mar 9, 2005

  1. Slide 1: ASX cover letter for investor presentation

    insurance Australia Group Limited ABN 60 090 739 923 388 George Street Sydney NSW 2000 Telephone 02 9292 9222 iag.com.au 9 March 2005 Manager, Company Announcements Office y Australian Stock Exchange Limited ‘ Level 4, Exchange Centre 20 Bridge Street IAG SYDNEY NSW 2000 insurance Australia Group De

  2. Slide 2: Presentation to Citigroup Australia & New Zealand Investment Conference

    Insurance Australia Group Limited Presentation to Citigroup Australia & New Zealand Investment Conference Michael Hawker, Chief Executive Officer 9 March 2005 ia cr EF concn 7 Insurance Australia Group Limited NEMA sGio pe Loou Ee ihe perare Ma! ABN 60 090 739 923 PEGA "Wate

  3. Slide 3: Important information

    important information IAG The information in this presentation is an overview and does not contain all information necessary to an investment decision. lesura ce Susetral COMLaRE The information contained in this presentation and accompanying materials has been prepared in good faith by |AG. No repr

  4. Slide 4: Who we are ...

    Who we 2re ... IAG ?eurance . 3 . . Aisstralies ¢ Australia & New Zealand’s largest insurers — over $6.4bn GWP in Group FY04 * Over 30% in each market and leading shares in most products ~ latest available data is 2002 but remains indicative * Qwn and operate leading brands Australia New Zealand 50%

  5. Slide 5: Outline

    Outline ¢ Our improved performance ¢ Strategy and outlook — Organic progress and outlook — Asia ¢ Questions near sGIo LHR A ER ggg ccu Bich Gp NA AUTRE Susetralin COMLaRE Insurance Australia Group Limited ABN 60 090 739 923 4

  6. Slide 6: Customers and people positive

    Customers and people positive © IAG Claim satisfaction trends fesurance 400% motor and home (direct channel} cassia ie aLAES 08% Engagement of our people 90% 4 IAG 2003 (45%) sagl 3S 2004 (63%) 85% ee : S% 80% 75% 70% Sept-01 May-02 Dec-02 May-03 Dec-O3 May-04 Nov-04 Critical HO MOLOF tthe Home: Zon

  7. Slide 7: Key insurance ratios

    Key insurance ratios 28.0% 26.0% 24.0% 22.0% 26.0% 18.0%. 16.0% 14.0% 12.0% 10.0% FYOt Administration ratio 105.0% 100.0% 95.0% 0.0% 85.0% 80.0% LHR A ER Expense ratio FYO2 FYO3 eFSL impact Combined ratio FY02 FYCS 90.0% 85.0% 80.0% 76.0% 70.0% 85.0% 80.0% 55.0% 50.0% 45.0% 40.0% FYO4 1HOS mComrissi

  8. Slide 8: Contributions to profit before tax

    A$m Contributions to profit before tax Components of [AG EBITDA (excl OEI) IAG 800 sr18m s7a0m 700 $559m 4 $263m 300 $142m 9 200 281 (100) (27) (24) (13) (200) (19) 4HOS 2H03 1HO04 2HO4 4HO5 Minsurance result W@ investment return on sharehoider funds W@Non-insurance margin® #2 Non-recurring items *N

  9. Slide 9: Retention rates (%) and insurance margin

    Retention rates (%) insurance margin (before tax} 98% 94% 92% F 90% 88% 88% 84% 82% 80% 7% 18% Sustained improvement in margins 18.8% 18.8% 14.8% 42.0%, 40.0%. Long-term expectation 9-12% 8.0% 6.0% 4.0% 2.0% 0.0% FYO1 FYO2 FYG3 FYO4 THOS: Strong retention rates in key portfolios 4HO4 2H04 4HOB* mam

  10. Slide 10: Return on equity improved

    Return on equity improved Annualised return on equity IAG 30.0% WSUEARGE 28.0% iat CAPaLaEe 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 40.0% 8.0% 6.0% 4.0% 2.0% (2.0%) (4.0%) — Average normalised 13.5% r Average actual 11.6% FY01 FY02 FY03 FY04 1HOS W@ROE (Actual) attributable to ordinary share

  11. Slide 11: Interim dividend increased by 50%

    Interim dividend increased by 50% © IAG AUTRE Susetralin 30.0 COMLaRE 4HO1 1HO2 1HO3 4HO4 1HOS @ Interim dividend EPS Continued improvement in interim dividends — supported by increased EPS Insurance Australia Group Limited ABN 60 090 739 923 70

  12. Slide 12: Strategy & outlook

    AUTRE Susetralin COMLaRE Strategy & outlook ia cr EF concn 7 Insurance Australia Group Limited NEMA sGio pe Loou Ee ihe perare Ma! ABN 60 090 739 923 "eat TOR

  13. Slide 13: Strategic goals

    Strategic goals AUTRE Generate top quartile total shareholder return pucnale Deliver a return on equity of at least 1.5 times weighted average cost of capital Establish an Asian foothold Maintain an 80:20 mix of short-tail:long-tail premiums Maintain a ‘AA’ category rating. Insurance Australia Group

  14. Slide 14: Strategic progress

    Strategic progress Progress now for internationalty——> | applicable core : competencies December 2004 We believe there are significant opportunities locally for the next few Delivered years Time Insurance Australia Group Limited Wr ABN 60 090 739 923 near Scio gaig o LHR A ER

  15. Slide 15: Diversified portfolio and operating conditions for organic business

    Diversified portfolio — and operating . conditions for organic business IAG AUTRE seinen COMLaRE Statutory classes Commercial Short-tail 5% 4% cae Personal lines FYO4 4HO5 Annualised WMotr @Home Health Other Shortail ygStort-tail Commercial Liability —ypCTP#Motor Rability g¢Workers’ Como Insurance A

  16. Slide 16: Outlook — drivers for organic business

    Outlook — drivers for organic business ¢ Profitability outlook influenced by a number of interacting IAG factors pauranice CAPaLaEe « External — Good economic performance in Australia and New Zealand Insurance Australia Group Limited ABN 60 090 739 923 near sGIo LHR A ER %5 saig (cau a

  17. Slide 17: Growth in domestic premium exceeds GDP

    Growth in domestic premium exceeds y GDP © Gren 5 20 Engr for policies of 7.3% 306 £ 260 2 15 - 240 - 5 220 5 & 10 200 ° 8 180 a 3 5 4 140 g 120 2 07 100 a Source: ABS for GDP & APRA General Insurance Statistics (December 1993 - December 2001 & June 2002), excluding reinsurers. No APRA statistics pu

  18. Slide 18: Outlook — drivers for organic business

    Outlook — drivers for organic business @ » * Profitability outlook influenced by a number of interacting IAG « External Good economic performance in Australia and New Zealand Increasing competitive pressures Reinsurance rates stable Stable liability classes due to tort law reforms Investment market

  19. Slide 19: Establishing an Asian foothold

    Establishing an Asian foothold © * Focus on countries with strong growth prospects for general 4" insurance with suitable environments — Multiplier effect of economic progress and increased general insurance penetration — Primary focus on China, Thailand, Malaysia & India — Secondary focus on Hong K

  20. Slide 20: Share price performance since listing

    Share price performance since listing IAG IesrAnce Fiseire COMLaRE IAG Share Price Performance 300 250 200 150 400 owmnn S&P/ASX200 Index IAG Share § == MSCI WORLD EX AUS index = ASX/SEP 206 INSURANCE INDEX “agli: ” Insurance Australia Group Limited NEMA SGTO sa ABN 60 090 739 923 LHR A ER 19

  21. Slide 21: Questions

    AUTRE Susetralin COMLaRE Questions ia cr EF concn 7 Insurance Australia Group Limited NEMA sGio pe Loou Ee ihe perare Ma! ABN 60 090 739 923 "eat TOR

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