IAG has announced plans to add one million new customers primarily through the expansion of the NRMA Insurance brand as part of CEO Nick Hawkins’ five-year vision for the business, which also involves the revitalisation of the insurer’s loss-making intermediated division.
At this week’s business update the insurer again reaffirmed its earnings guidance, confirming it aims to achieve a 10-12% reported insurance margin for this financial year against a backdrop of “low single-digit” gross written premium growth.
The five-year business growth agenda outlined by Hawkins and his team follows what has been a difficult period for the insurer, having recorded a $427 million loss in the last financial year. Measures have been taken to avert a repeat of the past lapses that led to the FY2020/21 loss, which includes a $1.15 billion pre-tax provision for business interruption claims related to the pandemic and $238 million for customer refunds arising from past pricing issues.
Hawkins said that they have gone to a lot of trouble over the last year or two years to significantly change the way they run the company, and that the business interruption issue “was partly driven by lack of some of that accountability and some of the complexity in actually how we were set up as a company.
He said his five-year blueprint to expand the insurer’s current 8.5 million customer base in Australia and New Zealand by one million is already taking shape through the launch of the NRMA Insurance brand nationally to WA, SA and the NT and introduction of Rollin’, a digital motor insurance offering aimed at consumers in their 20s and 30s.
Direct Insurance Australia aims to bring on board 750,000 of the one million customers the company is targeting over the next five years and deliver $400 million of value through initiatives to increase claims and supply chain effectiveness.
Direct Insurance Australia Group Executive Julie Batch says the business is not attracting as many younger customers as it should, describing the situation as a “missed opportunity”. “It is absolutely critical for our future that we build our customer base now by introducing our brands and creating relationships with Australians at a much earlier age,” she said.
Intermediated Insurance Australia Group Executive Jarrod Hill, who took up the role in September, said steps taken to improve the division over the last 18 months are now beginning to flow through to profitability, including exiting the IAL personal lines business. Hill added that he is establishing a dedicated underwriting office for Intermediated Australia to drive a “step change” in its underwriting process and will appoint a senior leader to this role in the very near future.
This article courtesy of insuranceNews. Check out the website at: https://www.insurancenews.com.au/.