Insurance Australia Group (IAG) says a consultation process involving employees is “currently underway” as the giant insurer prepares to shed jobs. The losses, according to the Finance Sector Union (FSU) include positions with Intermediated Insurance Australia (IIA), the division that serves brokers.
A media statement from an IAG spokesperson said, “No frontline customer claims roles are impacted.”
The statement was sent in response to IB’s questions about a recent media release from the FSU that said IAG plans to cut 214 jobs.
The FSU’s release said the union “has been advised” of the cuts to Direct Insurance Australia, the insurer’s largest division, and Intermediated Insurance Australia (IIA), the broker-facing service. The losses, it said, include roles that support digital business, direct claims, distribution and underwriting.
The IAG statement said the “proposed changes are designed to align teams under the new structure to ensure we have in place the most effective processes for our business to serve and support our customers.”
The statement said the changes are a result of combining the firm’s Growth and Distribution business units in March this year and also from moving the Partners and Platforms team into Retail Insurance Australia (RIA) in August.
The last widely reported round of job cuts at IAG occurred more than a year ago. In July 2023 the FSU said 54 jobs would go. An industry source told IB that a “small number of redundancies” would result from “repointing” functions to improve efficiencies in the separate intermediated and direct insurance divisions.
“If it’s good enough for CEO Nick Hawkins to get a 78% increase in pay to $5.23 million in 2023/24 then it’s good enough for IAG to continue employing its hard-working staff,” said Julia Angrisano (pictured above), the FSU’s national secretary.
The release referred to the insurer’s $1.42 billion in profits for the last financial year.
“Make no mistake, the IAG board have chosen to put profits ahead of their workers,” said Angrisano. “IAG workers have consistently stood by the company, taking on extra hours and being more productive.”
She said rewarding this loyalty with job cuts “is disgraceful.”
“Last month when IAG CEO Nick Hawkins reflected on the strength the IAG business, he acknowledged that those strong results came off the back of the hard work of IAG staff,” said Angrisano.
The FSU said its members are concerned about the impact on policyholders.
“Job losses have flow-on effects with remaining staff likely to face increased workloads, and customers who may be forced to wait longer to have their policies or claims dealt with,” said Angrisano.
IAG’s statement said the firm is focusing on “supporting our employees through the consultation process which is currently underway, and redeployment opportunities.”
The FSU has called on the IAG board to reconsider its decision.
The issue of insurers maintaining adequate staffing levels and resourcing, particularly during natural catastrophes, was raised during the government’s yearlong inquiry into the response of insurers to the 2022 floods.
That inquiry is due to table its report and recommendations in parliament next week.
Daniel Mulino MP, the chair of the inquiry, told Insurance Business that some recommendations will relate to themes that came out of a Deloitte report released in 2023.
The consultancy firm completed a flood report for the Insurance Council of Australia (ICA), The new benchmark for catastrophe preparedness in Australia. Among the recommendations was a call for insurers to improve their resourcing.
Many industry stakeholders are also concerned about the threat artificial intelligence (AI) poses to industry jobs.
Rackspace surveyed IT decision makers across a range of sectors in the Americas, Europe, Asia and the Middle East and received 52 responses from individuals at insurance companies.
The results suggested that lower-level manual jobs are most at risk.
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