Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Presentation (March 2012)
27 slides from Insurance Australia's investor presentation, Mar 9, 2012
Slide 1: CGU's revised operating model to deliver $65M in annual benefits
NEWS RELEASE 9 March 2012 CGU’S REVISED OPERATING MODEL TO For personal use only DELIVER $65M IN ANNUAL BENEFITS Insurance Australia Group Limited (IAG) today announced its Australia Intermediated business, CGU, was revising its operating model as part of its next phase of development. The new model
Slide 2: Investor Briefing
INVESTOR BRIEFING IAG and CGU management will be hosting an investor briefing at 11:00am (Sydney time) today. The For personal use only briefing will be webcast live on www.iag.com.au and a teleconference facility is available for analysts and media. Details are as follows: To call within Australia:
Slide 3: Australia Intermediated (CGU) Investor Briefing
9 March 2012 ABN 60 090 739 923 For personal use only AUSTRALIA INTERMEDIATED (CGU) INVESTOR BRIEFING Mike Wilkins Peter Harmer Managing Director and Chief Executive Officer Chief Executive Officer Australia Intermediated (CGU)
Slide 4: Important Information
IMPORTANT INFORMATION For personal use only This presentation contains general information in summary form which is current as at 9 March 2012. It presents financial information on both a statutory basis (which has been prepared in accordance with the Australian accounting standards, which comply wi
Slide 5: Agenda
AGENDA For personal use only 1. Overview Mike Wilkins 2. CGU Update Peter Harmer 3. Panel Discussion Peter Harmer Steve Nevett, Chairman, Pacific Region, Aon Robert Kelly, Chairman and CEO, Steadfast 4. Summary and Q&A Mike Wilkins Peter Harmer 3
Slide 6: Overview
For personal use only OVERVIEW Mike Wilkins Managing Director and Chief Executive Officer 4
Slide 7: IAG Strategic Priorities
IAG STRATEGIC PRIORITIES A CLEAR FOCUS ON AUSTRALIA, NEW ZEALAND AND ASIA For personal use only 5
Slide 8: Improved Performance: CGU Progress to Date
IMPROVED PERFORMANCE CGU PROGRESS TO DATE For personal use only CUMULATIVE FTE REDUCTION Since 2008, CGU has improved CGU’S REPORTED VS UNDERLYING INSURANCE MARGIN (%) underlying performance by around $160 million on an annualised basis 14.3% Focus has been on remediation, 11.8% 9.3% rebuilding
Slide 9: CGU Update
For personal use only CGU UPDATE Peter Harmer Chief Executive Officer CGU 7
Slide 10: A Clear Direction
A CLEAR DIRECTION STRATEGIC REVIEW IN 2011 For personal use only COMMITMENT TO FOCUS ON BUILDING DRIVING IMPROVED CORE STRATEGY COMPETITIVE ADVANTAGE PERFORMANCE Four years into five-year Sales-led relationship-based Commitment to delivering strategy account management double digit margin in F
Slide 11: Accelerating Performance
ACCELERATING PERFORMANCE DELIVERING SUSTAINABLE GROWTH THROUGH THE CYCLE REQUIRES CHANGE For personal use only Double-Digit Insurance Margin HORIZON 1 HORIZON 2 HORIZON 3 Portfolio remediation Focus on competitive Embed competitive Rebuild core competencies advantage advantage Business Dev
Slide 12: One CGU Operating Model
ONE CGU OPERATING MODEL A SIMPLER, EASIER AND MORE EFFECTIVE WAY TO DO BUSINESS For personal use only Financial One account management team for each channel Brokers & Direct to Motor Agents Institutions Employers Dealers Easier to do business with CGU & Affinity Maintain specialist workers’ co
Slide 13: One Account Team per Channel
ONE ACCOUNT TEAM PER CHANNEL MAKING IT EASIER TO DO BUSINESS WITH CGU For personal use only One account CURRENT STATE management team Intermediaries value relationship with CGU, but find organisation difficult to navigate Current service model does not fully reflect strength of relationship with
Slide 14: One Underwriting Team
ONE UNDERWRITING TEAM DRIVING PORTFOLIO STRATEGY AND UNDERWRITING DISCIPLINE For personal use only One account CURRENT STATE management team Distributed underwriting and portfolio management – governance through common frameworks and underwriting licences One underwriting Duplication of underwri
Slide 15: One Claims Model
ONE CLAIMS MODEL IMPROVED SERVICE, SCALABILITY AND REDUCED COSTS For personal use only One account CURRENT STATE management team Systems and processes vary across states One underwriting Mix of centralised claims teams and teams embedded in business units team KEY CHANGES One claims A more uni
Slide 16: One Operations Approach
ONE OPERATIONS APPROACH IMPROVING EFFICIENCY AND REDUCING OPERATING COSTS For personal use only One account CURRENT STATE management team Policy administration, credit control and some underwriting and claims functions delivered locally in regional and rural offices One underwriting team Inconsi
Slide 17: One Support Team
ONE SUPPORT TEAM CENTRALISED FUNCTIONS DRIVE EXCELLENCE AND REDUCE COST For personal use only One account CURRENT STATE management team Support functions are a mix of distributed and centralised teams One underwriting Significant duplication of functions, processes and frameworks team Speciali
Slide 18: One CGU Operating Model: Transforming the Way We Do Business
ONE CGU OPERATING MODEL TRANSFORMING THE WAY WE DO BUSINESS For personal use only End-to-end business units, generalist roles Function-based, specialist roles Multiple account teams servicing each channel One CGU team per channel Underwriting and claims duplication Centres of excellence Office-based
Slide 19: One CGU Delivery: Implementation Progress
ONE CGU DELIVERY IMPLEMENTATION PROGRESS For personal use only Capture benefits Transition and Ongoing to embed model end of FY15 Most activity New structure completed live in FY13 Senior End of March appointments Implementation plan Detailed design 17
Slide 20: One CGU Transition: Significant Benefits
ONE CGU TRANSITION SIGNIFICANT BENEFITS For personal use only Annual run rate benefits will reach $65m pre-tax by end of FY15 – CUMULATIVE FTE REDUCTION initial $25m delivered in FY13 Implementation cost estimated at $75m pre-tax to be recognised as corporate cost: 700 – $35m of implementation c
Slide 21: The Path to Delivery: One CGU Target Outcomes
THE PATH TO DELIVERY ONE CGU TARGET OUTCOMES For personal use only 160-year heritage More effective and efficient Double digit insurance margin operating model in FY13 Strong national brand Building competitive Continued improvement in Strong intermediary and advantage around channel u
Slide 22: Panel Discussion
For personal use only PANEL DISCUSSION Peter Harmer Steve Nevett Robert Kelly Chief Executive Officer Chairman Chairman and CEO CGU Pacific Region, Aon Steadfast 20
Slide 23: Summary and Q&A
For personal use only SUMMARY AND Q&A Mike Wilkins Managing Director and Chief Executive Officer 21
Slide 24: IAG Strategic Priorities
IAG STRATEGIC PRIORITIES 22 A CLEAR FOCUS ON AUSTRALIA, NEW ZEALAND AND ASIA For personal use only 22
Slide 25: Appendix: CGU Business Overview
For personal use only APPENDIX CGU Business Overview 23
Slide 26: CGU Business Overview: Diverse Portfolio Mix
CGU BUSINESS OVERVIEW DIVERSE PORTFOLIO MIX For personal use only 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 7% 10% 8% Commercial Short Tail SME 11%
Slide 27: CGU Business Overview: Diverse Distribution Footprint
CGU BUSINESS OVERVIEW DIVERSE DISTRIBUTION FOOTPRINT For personal use only ~8% of total Australian general insurance market ~14% of Australian intermediated general insurance market DISTRIBUTION CHANNELS GEOGRAPHIC SPLIT 1% 7% 3% Brokers 10% VIC & agents 27% 20% NSW/ACT QLD Financial 19% WA inst
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