Insurance Australia Group
Encyclopedia
Insurance Australia Group Limited (IAG) is an Australian publicly-listed company with its shares traded on the Australian Stock Exchange
as .
The company was formed by the demutualisation of the NRMA
Insurance business in July 2000 and a return of shares to the members of NRMA. According to its website, NRMA Insurance Group Limited changed its name to Insurance Australia Group Limited on 15 January 2002. IAG is the name of the listed entity; it is not a customer-facing brand, however it represents the umbrella organization
that holds many well known insurance brands.
IAG has a 70% shareholding in Insurance Manufacturers of Australia Limited (the other 30% being held by RACV
), which issues insurance under the RACV Insurance name that is sold by RACV.
provider in the country. IAG held a stake in CAA since 1999, increasing to full ownership in 2003.
In India, Insurance Australia Group has a joint venture with the State Bank of India
, India's largest and most recognised financial services organisation.
On 15 November 2006, IAG announced it intended to become carbon neutral
within five years across all of its operations.
however IAG denied the merger at the time. Speculation again emerged in 2006 only to be again denied.
On 10 April 2008, QBE proposed a takeover with each IAG share being exchanged for 0.135 QBE shares plus 50 cents cash (an effective value of $3.75 per IAG share at the time). This proposal was rejected by the IAG board the next day. QBE responded by increasing its proposal to 0.142 QBE shares plus 70 cents per IAG share. On 14 April 2008, IAG also rejected this proposal. On 16 May 2008, QBE increased its proposal to 0.145 QBE shares plus 90 cents per IAG share (an effective value of $4.60 per IAG share at the time). This was rejected by IAG four days later and on 21 May 2008 QBE confirmed talks had collapsed and withdrew its proposal.
Important items that were considered when QBE made its proposal :
IAG’s short tail personal insurance products are distributed in Victoria under the RACV brand, via a distribution
relationship and underwriting joint venture with RACV Limited. These products are distributed by RACV and
manufactured by Insurance Manufacturers of Australia Pty Limited (IMA), which is 70% owned by IAG and 30% by
RACV. If one of IMA’s shareholders were to experience a change of control, the other has a pre-emptive right to
acquire that shareholder’s interest in IMA at market value. The duration of the arrangements governing RACV’s
distribution of RACV-branded products in Victoria would be a relevant factor in determining this market value (as
would the duration of the arrangements governing IMA’s reinsurance of NRMA-branded products in NSW and the
ACT).
Australian Stock Exchange
The Australian Securities Exchange was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. It is the primary stock exchange group in Australia....
as .
The company was formed by the demutualisation of the NRMA
NRMA
NRMA refers to either of two historically related Australian companies:*The National Roads and Motorists' Association, known as NRMA Motoring and Services, is a member-owned mutual organisation offering , motoring advice and other services in New South Wales and the Australian Capital...
Insurance business in July 2000 and a return of shares to the members of NRMA. According to its website, NRMA Insurance Group Limited changed its name to Insurance Australia Group Limited on 15 January 2002. IAG is the name of the listed entity; it is not a customer-facing brand, however it represents the umbrella organization
Umbrella organization
An umbrella organization is an association of institutions, who work together formally to coordinate activities or pool resources. In business, political, or other environments, one group, the umbrella organization, provides resources and often an identity to the smaller organizations...
that holds many well known insurance brands.
Insurance business
Insurance Australia Group operates a number of different insurance brands in Australia, Asia and the UK including:Australia
- NRMA Insurance
- SGIOSGIOSGIO is an insurance brand of Insurance Australia Group trading in Western Australia. Until 1986, it was also the name of the Queensland financial institution now known as Suncorp. It is the major sponsor of the West Coast Eagles.- External links :* *...
, acquired in 1998 - SGICSGICSGIC is an insurance brand of Insurance Australia Group trading in South Australia. It was formerly the State Government Insurance Commission, providing compulsory third party motor vehicle insurance....
, acquired in 1998 - CGU InsuranceCGU InsuranceCGU Insurance Limited is an Australian intermediary-based insurance company and forms part of Insurance Australia Group .CGU Insurance was formed through the global merger of Commercial Union plc and NZI's parent company, General Accident plc. The global merger brought together two highly regarded...
, acquired in 2003 - Swann Insurance, acquired in 2003
- The Buzz Car Insurance, formed in 2009
IAG has a 70% shareholding in Insurance Manufacturers of Australia Limited (the other 30% being held by RACV
Royal Automobile Club of Victoria
The Royal Automobile Club of Victoria is a motoring club and mutual organisation, providing services such as roadside assistance, vehicle, home and contents insurance, personal and car loans, driving instruction, tourism services and home security products.The RACV runs a lifestyle club known as...
), which issues insurance under the RACV Insurance name that is sold by RACV.
New Zealand
- State InsuranceState InsuranceState Insurance is an insurance company based in New Zealand. "State" serves as a brand of IAG New Zealand Limited, a subsidiary of Insurance Australia Group.-History:State Insurance was formerly known as the State Insurance Office...
, acquired in 2001 - NZI (New Zealand Insurance)NZINZI or New Zealand Insurance was formed in 1859 and is one of New Zealand's largest and longest-serving fire and general insurance brands. In January 2003 Insurance Australia Group purchased NZI when acquiring Aviva's general insurance business...
, acquired in 2003 - NAC (National Auto Club)
- Mike Henry Travel
- Driveright
- Lantern Insurance
- Swann Insurance
Asia
- Safety Insurance, Thailand, held a stake in 1998, now holds 96% voting rights
- NZI Thailand, acquired in 2003
- AmAssurance, Malaysia, (49% ownership of AmG Insurance, which is part of AmAssurance)
Other business
In China, Insurance Australia Group owns CAA, the China Automobile Association, the largest roadside assistanceBreakdown cover
Breakdown cover is a service that provides assistance to motorists whose vehicles have suffered a mechanical failure that is significant enough to leave them stranded at their present location....
provider in the country. IAG held a stake in CAA since 1999, increasing to full ownership in 2003.
In India, Insurance Australia Group has a joint venture with the State Bank of India
State Bank of India
The State Bank of India is the largest Indian banking and financial services company with its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest...
, India's largest and most recognised financial services organisation.
Board of Directors
- Brian Schwartz AO, Chairman. Also chairman of the Insurance Manufacturers of Australia Pty Limited and on the board of Brambles LimitedBrambles LimitedBrambles Limited is a support services business listed on the Australian Securities Exchange.-History:Brambles traces its history to 1875, when Walter Bramble began his career in Newcastle, north of Sydney, Australia. Brambles Industries Limited first listed in Australia in 1954...
and the Westfield Group. - Michael Wilkins, CEO
- Hugh FletcherHugh FletcherHugh Fletcher is a New Zealand businessman and former Chancellor of the University of Auckland.-Early life:Hugh was the second son born to Sir James Fletcher and Vaughan, Lady Fletcher....
, Non-executive director - Anna Hynes, Non-executive director
- Phillip Colebatch, Non-executive director
- Yasmin Allen, Non-executive director
- Phillip Twyman, Non-executive director
Executive team
- Michael Wilkins, CEO Insurance Australia Group
- Justin Breheny, CEO IAG Asia
- Nicholas Hawkins, Group Chief Financial Officer
- Andy Cornish, CEO Direct Insurance
- Peter Harmer, CEO CGU Insurance
- Ian Foy, CEO IAG United Kingdom
- Jacki Johnson, CEO IAG New Zealand
- Leona Murphy, Group Executive, Corporate Office
Sustainability
On 31 August 2006, IAG was placed on the Dow Jones Sustainability Index. IAG is the first Australian insurance company to achieve this recognition.On 15 November 2006, IAG announced it intended to become carbon neutral
Carbon neutral
Carbon neutrality, or having a net zero carbon footprint, refers to achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset, or buying enough carbon credits to make up the difference...
within five years across all of its operations.
QBE merger speculation
In 2004, speculation emerged that IAG would merge with Australia's largest insurer QBE InsuranceQBE Insurance
QBE Insurance Group Limited is an Australian based general insurance provider, providing insurance services mainly to the Asia Pacific region, but also America and Europe . It has offices in 45 countries...
however IAG denied the merger at the time. Speculation again emerged in 2006 only to be again denied.
On 10 April 2008, QBE proposed a takeover with each IAG share being exchanged for 0.135 QBE shares plus 50 cents cash (an effective value of $3.75 per IAG share at the time). This proposal was rejected by the IAG board the next day. QBE responded by increasing its proposal to 0.142 QBE shares plus 70 cents per IAG share. On 14 April 2008, IAG also rejected this proposal. On 16 May 2008, QBE increased its proposal to 0.145 QBE shares plus 90 cents per IAG share (an effective value of $4.60 per IAG share at the time). This was rejected by IAG four days later and on 21 May 2008 QBE confirmed talks had collapsed and withdrew its proposal.
Important items that were considered when QBE made its proposal :
IAG’s short tail personal insurance products are distributed in Victoria under the RACV brand, via a distribution
relationship and underwriting joint venture with RACV Limited. These products are distributed by RACV and
manufactured by Insurance Manufacturers of Australia Pty Limited (IMA), which is 70% owned by IAG and 30% by
RACV. If one of IMA’s shareholders were to experience a change of control, the other has a pre-emptive right to
acquire that shareholder’s interest in IMA at market value. The duration of the arrangements governing RACV’s
distribution of RACV-branded products in Victoria would be a relevant factor in determining this market value (as
would the duration of the arrangements governing IMA’s reinsurance of NRMA-branded products in NSW and the
ACT).