Insurance Australia Group

IAG has a portfolio of general insurance businesses with leading and established brands across its home markets of Australia and New Zealand, a growing presence in Asia, and other specialist underwriting operations.

IAG underwrites around $7.8 billion of insurance premiums each year and employs around 13,500 people.

We have been assigned a ‘Very Strong’ Insurer Financial Strength Rating of ‘AA-’ by Standard & Poor’s for our key wholly-owned insurance companies.

Our international footprint % of Gross Written Premium for the year ended 31 December 2010	Our portfolio of products % of Gross Written Premium for the year ended 31 December 2010

Our group strategy

The Group’s strategy is to manage a portfolio of high performing, customer-focused diverse operations that provide general insurance in a manner that delivers superior experiences for stakeholders and creates value for shareholders.

The concept of a portfolio should enable the Group to deliver a more consistent performance, despite owning a group of general insurance businesses operating at different stages in both the economic and the insurance cycle.

Our strategic priorities

In June 2011, the Group reset its strategic priorities to:

• accelerate growth in Australia and New Zealand by stepping up initiatives to drive profitable organic growth, while remaining open to acquisitive opportunities that may arise;
• restore profitability in the UK; and
• boost its Asian footprint so the Asia division delivers 10% of the Group’s gross written premium by 2016. Asia remains a priority region for the Group, and is vital to its medium to long-term growth. IAG is now focused on accelerating its expansion plans beyond the countries in which it has an existing presence, into other target markets, and on delivering on the enormous potential attached to its Indian joint venture which is now up and running.

Read more about our Strategy

Our financial targets

• Top quartile total shareholder return (TSR); and
• ROE greater than 1.5 times the weighted average cost of capital (WACC).

The aim is to achieve these targets through the cycle, given the nature and volatility of insurance. The clear focus is on margin and profitability.

Our major brands and operating model

IAG has a portfolio of end-to-end businesses aligned around customers, brands and markets. We have a devolved model that puts accountability and responsibility close to the end customer.

1. 1. RACV is via a distribution relationship and underwriting joint venture with RACV Limited.
2. 2. RACV has a 30% interest in The Buzz.
3. 3. 49% ownership of the general insurance arm of AmBank Group, AmG Insurance Berhad, trading under the AmAssurance brand.
4. 4. 98% voting rights in Safety Insurance, based in Thailand.
5. 5. 26% ownership of SBI General Insurance Company, a joint venture with the State Bank of India.

Australian operations

IAG’s Australian operations distribute a range of personal and commercial insurance products, both directly to the customer and indirectly through a network of intermediaries. There are three businesses in IAG’s Australian operations: Australia Direct Insurance, the Group’s largest business, distributes products through a network of branches, franchises and country service centres throughout metropolitan, regional and rural Australia, as well as through call centres and online. Products are distributed under the NRMA Insurance brand in NSW, Queensland, ACT and Tasmania; SGIC in South Australia; SGIO in Western Australia; and RACV in Victoria; Australia Intermediated Insurance, known as CGU, sells products nationally, through intermediary channels, including a network of more than 1,000 insurance brokers and authorised representatives, as well as through motor dealerships and financial institutions; and The Buzz, our online insurer. Customers interact with The Buzz online through the entire lifecycle of their insurance policy – from buying their car or home insurance policy, right through to making a claim. Launched in May 2009, The Buzz was created based on direct feedback from customers, making it an online business which was genuinely shaped by the community.

International operations

IAG’s international operations consist of interests in New Zealand, Asia and the UK.

New Zealand

IAG is the leading general insurance provider in New Zealand across both direct and intermediated channels. Insurance products are predominantly sold directly to customers under the State brand and through intermediaries (insurance brokers and authorised representatives) under the NZI brand. Personal lines and commercial products are also distributed under third party brands by IAG’s corporate partners, including large financial institutions.

Asia

IAG has a growing presence in Asia. In Thailand, it owns commercial insurer NZI Thailand and personal insurer Safety Insurance. In Malaysia, IAG has an interest in the general insurance arm of AmAssurance, AmG. In India, IAG has established a general insurance joint venture with the State Bank of India (SBI), known as SBI General Insurance. SBI has over 100 million customers and 11,000 branches across the country and access to an additional 46 million customers and 4,500 branches when including its subsidiaries. In China, IAG has a roadside assistance operation and insurance agent, CAA.

United Kingdom

In the UK, IAG has a specialist motor underwriting operation, Equity Red Star. Equity Red Star commenced operations in 1946 and has grown to become the largest personal lines syndicate at Lloyd’s, providing insurance to business and personal customers. It was acquired by IAG in 2007. The UK business also includes Equity Broking affinity business and specialist commercial broker Barnett & Barnett http://www.iag.com.au/about/index.shtml