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IAG aims to expand ‘beyond general insurance’

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IAG wants to grow outside its traditional general insurance territory, as it looks to pull back from Asia and focus on the local market.

In an online discussion with shareholders, CFO Nick Hawkins describes how the company is looking to simplify its geographic footprint and processes, but expand its product suite.

“We have sold our businesses now in Thailand, Indonesia and Vietnam and we continue to have investments in Malaysia, India and a very small investment in China,” he said.

“We are more of an Australian and New Zealand business than we were three or four years ago.

“We see Asia as having been a successful venture for our company but in decisions as to where to from here we see more opportunities in Australia and New Zealand.”

Mr Hawkins says IAG has “wonderful relationships” with 8 million customers but that “we generally provide them with just general insurance products”.

“We do see opportunities for expanding our offerings, products and services, slightly broader than our existing pure-play general insurance business.

“But they have got to be things that relate to what we do.

“We are a purpose-driven organisation, we’re all about how we are making your world a safer place so in thinking about how we can help our customers it has got to be driven around that purpose.”

Mr Hawkins also discusses the company’s efforts to tackle the impact of climate change.

“This is a big deal for us,” he says.

“We are a very significant property insurer across Australia and New Zealand and we are very exposed.

“We invest heavily in this. We have a whole team, the natural perils team, where we have a number of scientists and others involved to make sure we understand the science of what is happening here.

“What we are seeing of course is increased frequency and severity of weather impacting our customers, therefore impacting us, and impacting our shareholders.”

Mr Hawkins says more important than gathering the knowledge, is what IAG does with it.

It aims to pass that knowledge on to communities and governments to influence development planning and improve building standards.

“This is not a short term gain, it is about influencing the resilience of our country over a period of time to ensure that we can deal with a larger impact from weather going forward than we have in the past.”

Mr Hawkins says the Hayne royal commission was “a pretty big positive” for IAG as the process didn’t uncover anything about the company “that we didn’t know”.

But IAG has allocated an extra $30 million per year to pay for the increased cost of compliance.

“What we know is we are definitely going to have more scrutiny. We are definitely going to have more active regulators looking within our businesses.”