Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — CEDA (May 2009)
16 slides from Insurance Australia's conference presentation, May 25, 2009
Slide 1: Weathering the Financial Crisis
WEATHERING THE FINANCIAL CRISIS CEDA 25 MAY 2009 MICHAEL WILKINS MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER
Slide 2: Agenda
AGENDA 1 WHO WE ARE 2 EXTERNAL INFLUENCES ON THE GENERAL INSURANCE INDUSTRY 3 DRIVING SUSTAINABLE BUSINESS OUTCOMES PAGE 2
Slide 3: Who We Are
= WHO WE ARE IAG ice Australia Group
Slide 4: Our Business Model and Brands
OUR BUSINESS MODEL AND BRANDS DIRECT INTERMEDIATED ONLINE DIRECT DIRECT INTERMEDIATED INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE **** ** *** UNITED KINGDOM NEW ZEALAND AUSTRALIA INTERMEDIATED INTERMEDIATED ASIA INSURANCE INSURANCE OTHER * * RACV is via a distribution relationship an
Slide 5: External Influences on the General Insurance Industry
2 EXTERNAL INFLUENCES ON THE GENERAL INSURANCE INDUSTRY
Slide 6: General Insurance – A Cyclical Industry
GENERAL INSURANCE – A CYCLICAL INDUSTRY AUSTRALIAN GENERAL INSURANCE INDUSTRY ROE % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Jun 2002 Jun 2003 Jun 2004 Jun 2005 Jun 2006 Jun 2007 Jun 2008 Dec 2008 Source: APRA general insurance statistics PAGE 6
Slide 7: Natural Perils – Core Business for Insurers
NATURAL PERILS – CORE BUSINESS FOR INSURERS 2,500 Australia's major insurance losses 1974 - 2009 2,000 1,500 1,000 500 0 y s le in s y e e ra y y s ne rm st rw f ire ne VI C an or m an er LD ka ne rm d to a a d b t b b Q c d o Sy c D n Sy & is ils is an , a Sy st s l e S ew y, o ria s S A Br ha Br C
Slide 8: The Global Financial Crisis at a Glance
THE GLOBAL FINANCIAL CRISIS AT A GLANCE THE IMF IS PROJECTING A 1.4% DECLINE IN AUSTRALIA’S GDP FOR FINANCIAL YEAR 2008-09 • Reduced household consumption • Reduced dwelling approvals • Increased unemployment • Reduced consumer confidence • Reduced demand for commodities • Reduced commodity prices S
Slide 9: How Does the Crisis Impact General Insurers?
HOW DOES THE CRISIS IMPACT GENERAL INSURERS? 1 Falling investment returns Potential 2 A slowdown in policy consequences of growth the crisis 3 Increased claims costs PAGE 9
Slide 10: Driving Sustainable Business Outcomes
3 DRIVING SUSTAINABLE BUSINESS OUTCOMES
Slide 11: Our Corporate Strategy - Getting the Fundamentals Right
OUR CORPORATE STRATEGY - GETTING THE FUNDAMENTALS RIGHT OUR • Top quartile TSR • Improve our performance in TARGETS • ROE > 1.5x WACC Australia and New Zealand • Pursue selective international OUR growth options – Asia and other narrow specialist STRATEGIC opportunities PRIORITIES • A devolved model
Slide 12: Maintaining a Conservative Investment Approach
MAINTAINING A CONSERVATIVE INVESTMENT APPROACH As at 31 Dec 2008 Group Investment Asset Exposure - $10.6bn Group Fixed Interest and Cash - $9.8bn Bonds < Bonds 'A' 'A'/ Unrated 2% Cash Growth 1% 8% 8% Banks, Risk Free Financial Assets Institutions 'AAA' & Other 34% Bonds 'AA' Fixed 41% Money Other I
Slide 13: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION 0.04 0.13 0.23 1.65 1.51 31 December $450m $84m Share Sub-debt Proforma MCR 2008 MCR Institutional Purchase Plan Repurchase post Capital Placement Raising PAGE 13
Slide 14: Offering Customers Flexibility to Meet Their Needs and Budgets
OFFERING CUSTOMERS FLEXIBILITY TO MEET THEIR NEEDS AND BUDGETS PAGE 14
Slide 15: Driving Long Term Success
DRIVING LONG TERM SUCCESS PAGE 15
Slide 16: Our Business Model and Brands
OUR BUSINESS MODEL AND BRANDS DIRECT INTERMEDIATED ONLINE DIRECT DIRECT INTERMEDIATED INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE INSURANCE **** ** *** UNITED KINGDOM NEW ZEALAND AUSTRALIA INTERMEDIATED INTERMEDIATED ASIA INSURANCE INSURANCE OTHER * ACTIVE PORTFOLIO MANAGEMENT & GOVERNANCE (CO