Insurance Australia Group: Difference between revisions

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{{Short description|Insurance company in Australia}}

[[Image:IAG_header_logo.gif|thumb|IAG Logo]]

{{more citations needed|date=December 2006}}

{{Use dmy dates|date=January 2021}}

{{Use Australian English|date=August 2011}}

{{Infobox company

| name = Insurance Australia Group Limited

| logo = IAG Logo.svg

| logo_size = 100px

| type = [[Public company|Public]]

| traded_as = {{ubl|{{ASX|IAG}}|[[S&P/ASX 200]] component}}

| foundation = 2000 (renamed from NRMA Insurance Group in 2002)

| ___location = Level 13, Tower Two, Darling Park<br> 201 Sussex Street<br> Sydney NSW 2000<br> Australia

| key_people = Tom Pockett (chair and independent non-executive director)<br>Nick Hawkins (managing director and CEO, executive director)

| area_served = Australia<br> New Zealand<br> [[Thailand]]<br> [[Malaysia]]

| industry = [[Insurance]]

| products = [[General insurance|General]], [[Business insurance|commercial]], [[Vehicle insurance|vehicle]], [[Home insurance|home]] and [[Contents Insurance|contents]] insurance

| revenue = {{increase}} [[Australian dollar|A$]]11.8 billion (2017)<ref name="IAGL 2017 annual report">IAGL 2017 annual report</ref>

| net_income = {{increase}} [[Australian dollar|A$]]929 million (2017)<ref name="IAGL 2017 annual report">IAGL 2017 annual report</ref>

| num_employees = 13,500+

| divisions =

| subsid = NRMA Insurance, [[CGU Insurance]], [[State Government Insurance Office (Western Australia)|SGIO]], [[SGIC]], Swann Insurance, NZI, AMI Insurance, NZI Thailand, Safety Insurance, AmAssurance, [[Lumley Insurance]], Coles Insurance, WFI, ROLLiN' Insurance

| homepage = {{URL|iag.com.au}}

}}

'''Insurance Australia Group Limited''' ('''IAG''') is a [[Multinational corporation|multinational]] [[insurance]] company. It is the largest [[general insurance]] company in Australia,<ref name=IBNZ/> and also the largest in New Zealand through its subsidiary [[IAG New Zealand]]. IAG had its origins in the National Roads and Motorists' Association NRMA. It is headquartered in [[Sydney]], [[Australia]].

The NRMA Insurance business demutualised in July 2000, separating from NRMA, with an issue of shares to NRMA members. NRMA Insurance Group Limited changed its name to Insurance Australia Group Limited on 15 January 2002, according to its website. IAG is an umbrella organization with numerous well known insurance brands it has acquired.<ref name=IBNZ>{{cite web |url= https://www.insurancebusinessmag.com/nz/companies/iag/50740/ |title=IAG : Everything you need to know |work=Insurance Business NZ |publisher=Key Media |access-date=18 August 2022}}</ref> The name ''IAG'' is not itself a customer-facing brand.

'''Insurance Australia Group Limited''' is an Australian publicly listed company with its shares traded on the [[Australian Stock Exchange]] as {{asx|IAG}}.

IAG is listed on the [[Australian Securities Exchange]] and is a constituent of the [[S&P/ASX 50]] index.

The company was formed by the demutualisation of the NRMA Insurance business in July [[2000]] and a return of shares to the members of [[NRMA]]. According to its website on [[15 January]] [[2002]], NRMA Insurance Group Limited changed its name to Insurance Australia Group Limited.

==Operations==

Insurance Australia Group is the name of the listed entity and the symbol of the company. IAG is not a customer facing retail name. However it represents the holding company - which is the glue that holds the retail brands together.

Insurance Australia Group has operations in Australia and New Zealand and a presence in five countries in Asia. Its businesses and brands include:

===Australia===

Insurance Australia Group operates a number of different insurance brands in Australia, Asia and the UK including:

*[[NRMA]] Insurance

*[[State Government Insurance Office (Western Australia)|SGIO]], acquired in 1998

*[[SGIC]], acquired in 1998

*[[CGU Insurance]], acquired in 2003

* Swann Insurance, acquired in 2003

* WFI, acquired in 2014

* MotorServe, acquired 2019<ref>{{cite web|url=https://motorserve.com.au/about-motorserve/ | title=About MotorServe | accessdate=2021-12-08}}</ref><ref>{{cite web | url=https://www.insurancebusinessmag.com/au/news/breaking-news/iag-acquires-nrmas-motorserve-business-192193.aspx | title= IAG acquires NRMA's MotorServe business | work=Insurance Business Australia | date=2019-11-21 | accessdate=2021-12-08}}</ref>

* ROLLiN' Insurance

IAG has a 70% shareholding in Insurance Manufacturers of Australia Pty Limited (the other 30% being held by [[Royal Automobile Club of Victoria|RACV]]), which issues insurance under the RACV Insurance name that is sold by RACV in Victoria.

* CGU Insurance (acquired in January 2003)

* SGIO (acquired in [[1998]])

* SGIC (acquired in 1998)

* Swann Insurance (acquired in January 2003)

* [[NRMA]] Insurance

* NZI (New Zealand and Thailand)

* Safety Insurance (Thailand)

* Hastings (UK)

* [[Equity Insurance Group]] (UK)

In 2014, IAG signed a ten-year agreement to distribute home and car policies for Coles Insurance.

IAG has a 70% shareholding in Insurance Manufacturers of Australia Limited (the other 30% being held by [[Royal Automobile Club of Victoria|RACV]]) which issues insurance under the RACV Insurance name that is then sold by RACV.

===New Zealand===

IAG also owns [[State Insurance]] (acquired in February [[2001]]) and [[NZI Insurance]] (finalised in January [[2003]]) in New Zealand. IAG's New Zealand subsidiary is a 25% shareholder in [[Loyalty New Zealand Limited]] the operator of [[Flybuys]] in New Zealand. IAG holds this shareholding through its ownership of State Insurance.

*[[State Insurance]], acquired in 2001

*[[NZI|NZI (New Zealand Insurance)]], acquired in 2003

*[[AMI Insurance]], acquired in 2012

*Lumley, acquired in 2014

*[https://www.lanterninsurance.co.nz/Pages/Lantern-Insurance.aspx Lantern Insurance]

*Swann Insurance (New Zealand)

===Asia===

IAG's biggest competitor is likely to be the [[Promina Group]] who operate AAMI, Just Car and other insurance brands.

*Thailand - IAG held a 98.6% beneficial interest in Safety Insurance, based in Thailand, which trades under the Safety and NZI brands, until 2018 when it sold its holding to Tokio Marine.<ref>https://www.iag.com.au/iag-announces-sale-operations-thailand-indonesia-and-vietnam</ref>

*Malaysia - IAG owns 49% of the general insurance arm of Malaysian-based AmBank Group, AmGeneral Holdings Berhad, which trades under the AmAssurance and Kurnia brands

*Vietnam - IAG owned 63.17% of AAA Assurance Corporation until 2018, when it sold its holding to Tokio Marine.<ref>https://www.iag.com.au/iag-announces-sale-operations-thailand-indonesia-and-vietnam</ref>

*Indonesia - IAG owned 80% of PT Asuransi Parolamas until 2018, when it sold its holding to Tokio Marine.<ref>https://www.iag.com.au/iag-announces-sale-operations-thailand-indonesia-and-vietnam</ref>

==History==

== Board of Directors ==

In 2004, there was speculation that IAG would merge with Australia's then largest insurer [[QBE Insurance]], however IAG denied the merger.<ref>{{cite news | last = Hoyle | first = Simon | title = Insurance duo tipped to tie the knot | publisher = The Age | date = 6 October 2004 | url = http://www.theage.com.au/articles/2004/10/05/1096949514339.html}}</ref> Speculation emerged and was denied again in 2006.<ref>{{cite news | title = QBE, IAG hose down takeover rumour | publisher = The Age | date = 13 January 2006 | url = http://www.theage.com.au/news/Business/QBE-IAG-hose-down-takeover-rumour/2006/01/13/1137118962951.html}}</ref>

On 10 April 2008, QBE proposed a takeover, with each IAG share being exchanged for 0.135 QBE shares plus 50 cents cash (an effective value of $3.75 per IAG share at the time). This proposal was rejected by the IAG board the next day. QBE responded by increasing its proposal to 0.142 QBE shares plus 70 cents per IAG share. On 14 April 2008, IAG also rejected this proposal. On 16 May 2008, QBE increased its proposal to 0.145 QBE shares plus 90 cents per IAG share (an effective value of $4.60 per IAG share at the time). This was rejected by IAG four days later and on 21 May 2008 QBE confirmed talks had collapsed and withdrew its proposal.<ref>{{cite web | title = Public offers and proposals (FAQ) | publisher = IAG | url = http://www.iag.com.au/shareholder/offers/index.shtml | access-date = 8 February 2008 | url-status = dead | archive-url = https://web.archive.org/web/20080216004036/http://www.iag.com.au/shareholder/offers/index.shtml | archive-date = 16 February 2008}}</ref>

* James Strong, AO, Chairman. Also chairman of [[Woolworths Limited]], [[Rip Curl]] and Australian Council for the Arts.

* Michael Hawker, CEO

* Yasmin Allen, Non-executive director

* John Astbury, Non-executive director

* Phillip Colebatch, Non-executive director

* Geoffrey Cousins, Non-executive director

* Neil Hamilton, Non-executive director

* Rowan Ross, Non-executive director

* Brian Schwartz, Non-executive director

Important items that were considered when QBE made its proposal: IAG's short tail personal insurance products are distributed in Victoria under the RACV brand, via a distribution relationship and underwriting joint venture with RACV Limited. These products are distributed by RACV and manufactured by Insurance Manufacturers of Australia Pty Limited (IMA), which is 70% owned by IAG and 30% by RACV. If one of IMA's shareholders were to experience a change of control, the other has a pre-emptive right to acquire that shareholder's interest in IMA at market value. The duration of the arrangements governing RACV's distribution of RACV-branded products in Victoria would be a relevant factor in determining this market value (as would the duration of the arrangements governing IMA's reinsurance of NRMA-branded products in NSW and the ACT).

== Executive Team ==

On 16 December 2013 IAG announced that it had agreed to purchase Wesfarmers Insurance underwriting businesses. The acquisition comprised companies trading under the WFI and Lumley brands, as well as a ten-year distribution agreement with Coles.

* Michael Hawker, CEO Insurance Australia Group

* Justin Breheny, CEO Asia

* Tony Coleman, Chief Risk Officer and Group Actuary

* Peter Connell, CEO Hastings Insurance Services

* Nicholas Hawkins, CEO IAG New Zealand

* David Issa, CEO Personal Insurance

* Jacki Johnson, CEO Business Partnerships

* Christine McLoughlin, Group Executive - Strategy

* Sam Mostyn, Group Executive - Culture and Reputation IAG

* Mario Pirone, CEO CGU Insurance

* Neil Utley, CEO Equity Insurance Group

* Jan Van Der Schalk, CEO Asset Management and Reinsurance

* George Venardos, Chief Financial Officer

In 2015, IAG share price has fallen 9% since it reported its interim result. The insurer's net profit for the six months to December fell 10% to $579m due to intensifying competition and a jump in natural disaster claims. Disaster claims of $421m exceeded the company's expectations by $71m, mainly on account of $165m in claims following Brisbane's November hail storm – the worst seen in 30 years.

IAG's New Zealand business delivered a 26% rise in gross written premiums, though entirely on account of adding Wesfarmers' NZ-based operations. The underlying [[profit margin]] increased from 14.2% to 15.9% due to a period of few natural disasters but the company is still feeling pain from the massive 2011 Canterbury earthquakes.<ref>{{cite news|last=Witcomb|first=Graham|title=IAG: Interim result 2015|url=https://www.intelligentinvestor.com.au/shares/iag-interim-result-2015|access-date=14 March 2015|newspaper=[[Intelligent Investor (Company)]]|date=4 March 2015}}</ref>

== Sustainability policies ==

In June 2015, [[Berkshire Hathaway]] acquired a 3.7 percent stake in the group for a fee of around $388 million in a partnership aimed at reducing IAG's capital requirements.<ref>{{cite web|author=Lincoln Feast |url=https://www.reuters.com/article/us-iag-ltd-berkshire-hatha-investment/buffetts-berkshire-hathaway-takes-388-million-stake-in-australias-iag-idUSKBN0OV2WX20150616 |title=Buffett's Berkshire Hathaway takes $388 million stake in Australia's IAG |publisher=Reuters |date=16 June 2015 |access-date=20 May 2021}}</ref>

On [[August 31]] [[2006]], IAG was placed on the Dow Jones Sustainability Index<ref>Dow Jones Sustainability Index 2006 [http://www.sustainability-index.com/djsi_protected/djsi_world/components/DJSIWorld_Country_Rev2005.pdf]</ref>. IAG is the first Australian insurance company to achieve this recognition.

==See also==

On November 15, 2006, IAG announced it intended to become [[carbon neutral]] within five years across all of its operations.<ref name="CarbonNeutral">{{cite web | url=http://www.iag.com.au/pub/iag/sustainability/media/carbon_neutral.pdf | title = Carbon Neutral Announcement Media Release | work = IAG Website | accessdate =2007-02-25 }}</ref>

* [[Insurance in Australia]]

== References ==

{{Reflist}}

<references/>

== External links ==

{{Commons category|Insurance Australia Group}}

{{Primarysources|date=December 2006}}

*{{Official [website|http://www.iag.com.au/ Insurance Australia Group web site]}}

{{S&P/ASX 50}}

{{Authority control}}

[[Category:Insurance companies of Australia]]

[[Category:Financial services companies established in 2000]]

[[Category:Financial services companies based in Sydney]]

[[Category:Companies listed on the Australian Securities Exchange]]

[[Category:Companies in the S&P ASX 50]]

[[Category:Holding companies of Australia]]