Early this year, Jarrod Hill (pictured above) said that by the end of 2024, Insurance Australia Group (IAG) would be starting to “shift and change” the way it engages with brokers.
Hill referred to “specific examples” of IAG’s 2024 progress in the intermediated space.
“These examples are evidence of our ability to incrementally deliver change at the same time as we undertake a broader business transformation within IIA [Intermediated Insurance Australia],” he said.
Hill gave this approach a new catchphrase: “perform and transform”.
The CEO said that the changes currently impacting brokers include underwriting improvements across commercial insurance offerings, process redesign and technology in the claims area and pricing improvements in WFI.
“This included transitioning our pricing functionality from the legacy WI90 system to new technical models and algorithms,” said Hill. “The 21-percentage-point margin improvement in WFI since FY21 is evidence of the value of this work.”
However, Padlock, a broker-focused initiative for SMEs that was expected to launch by the end of this year in the commercial property space, is now due for launch next year.
In an interview with Insurance Business in February, Hill said this offering was “a priority” that would help brokers handle property and liability coverages for property owning customers more efficiently.
“We will launch our first product on this platform, Padlock, in the fourth quarter of this financial year,” Hill said at this week’s investor presentation.
He also suggested there’s a lot of work to come, including across CGU’s range of business insurance offerings.
“SME is CGU’s traditional heartland, but we do not believe our current market position reflects the strength of our brand or where we want to be,” said Hill. “We know that we must be more efficient internally to ensure we continue to offer competitively priced products.”
Legacy systems are still a significant issue.
“Legacy systems currently inhibit our ability to compete as effectively as we would like,” he said. “We have made progress around service delivering a 35-point uplift in our broker NPS in the last 24 months, and we now have a pathway to achieve our medium-term goals.”
He said WFI “faces similar technology related challenges to CGU…”
However, Hill said the intermediated division’s recent delivery of a profit above its $250 million target, is a “solid earnings base” for “transforming IIA into Australia’s leading intermediated insurer.”
He detailed some of the challenges, including absorbing the cost of core platform modernisation while meeting financial goals.
“To be successful over the medium term we will become more agile and innovative in the way we engage with brokers and customers, while maintaining strong underwriting discipline driven by data-based analytics and decisions,” he said.
During his presentation, the CEO summarised the challenges facing insurers and brokers in the commercial insurance space. Hill said this market is in a “transitional” phase.
“We believe the commercial insurance market in Australia will face continued change in the next few years, driven by external factors,” said Hill. “With our broking partners deploying different strategies and technology capabilities, we believe the key attributes for a successful carrier will be agility, efficiency and service.”
He listed some of the factors expected to drive the changes:
At a conference last month in the United States, Neil Morgan, IAG’s chief operating officer, elaborated on his firm’s artificial intelligence (AI) strategy.
Morgan said IAG is deploying 150 specially trained staff, called activators. Their role, he said, is to implement generative AI (Gen AI) tools across the entire company.
“We're referring to it as inclusive innovation and trying to create that concept across the company,” Morgan told IB.
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