IAG is seeing early evidence of benefits from an intermediated technology overhaul that comes ahead of a wider rollout, according to CGU and WFI Insurance CEO Jarrod Hill.

He says the tech has allowed 80% of quotes for the Padlock commercial property product launched in June to go straight through, removing past delays and inefficiencies.

“We have had a lot of people doing manual underwriting on small-value policies. So the end-to-end process has significantly shortened, and we’ve taken a lot of the frictional effort and cost out of that, and we’ll continue to enhance that,” he told insuranceNEWS.com.au.

Mr Hill says the ability to handle policy endorsements had been added for Padlock, and other changes will let brokers complete more tasks without emailing back and forth with the insurer.

Business package, agricultural products, other SME policies and personal lines will be added over the next 12-18 months, he said yesterday after the release of IAG’s annual results.

The expansion of the Commercial Enterprise Platform follows the rollout of new technology at IAG’s retail operations in Australia and New Zealand.

Intermediated Australia gross written premium rose 6.3% last financial year to $4.55 billion, with commercial short tail up 3% to $2.6 billion. Long-tail commercial, including multi-year workers’ compensation, grew 10.6% and personal was up 11.7%.

The reported insurance profit was $328 million, down from $334 million the previous year, and the underlying margin was 11.5% compared with 11.7%.  

Mr Hill says the local market remains disciplined, with more competition for large accounts traded globally into the London market, particularly in property classes. Pricing has “somewhat moderated” in SME, while the personal lines market is achieving rate to cover inflation.

“It’s a multipaced market at the moment, and we’re keeping an eye on that,” he said.

IAG has restructured the intermediated business, with CGU to have a separate licence also including WFI.

Mr Hill says this will increase flexibility around the use of capital to support the commercial business, with discussions under way.

“Our ability to seek alternate capital from how the group sets up its capital structures is enhanced by having a separate licence,” he said.

IAG’s total net profit grew 51.3% to $1.36 billion last financial year.