Glossary

Below are details of the definitions used in the content and calculation of data represented in the graphs and charts in sections of this report. Unless specified otherwise, indicators pertain to Australian and New Zealand data. New Zealand brands included in the definitions include State and NZI unless otherwise stated.

Accident Compensation Commission (ACC):

ACC is New Zealand's workplace safety authority. Number of injuries accepted by ACC as work related.

Absenteeism:

Employee absenteeism is a measure to indicate the absence level in IAG. Absenteeism is determined by dividing the total annual unscheduled absence days by total number of available (rostered) working days for all employees in the year. In the previous year, the total hours per year were calculated including scheduled leave, whereas this year the leave was excluded.

Air travel:

Distance travelled by IAG employees including domestic, trans-Tasman and international flights booked through the online travel service provider. New Zealand results include brands: State, NZI, Swann Insurance and NAC.

Business Volume:

This measures the volume of business at a point in time. The basis of the measure depends on the class of business. In the personal lines class, the relevant volume measure is 'risks in force'. In commercial classes, the volume measure is 'policies in force'. The difference in the definition is required to capture the distinct nature of IAG's business mix. New Zealand brands included in this measurement: State, NZI, Mike Henry Travel Insurance.

CO₂ emissions:

In this instance, CO₂ emissions are calculated for electricity use, office paper and print paper consumption, tool of trade fuel consumption and air travel. For Australia, emission factors are obtained from the Australian Greenhouse Office (AGO) 2006 workbook (electricity and tool of trade), from the Australian Paper Industry Council 2005 (paper) and the World Business Council for Sustainable Development (Greenhouse Gas Protocols - air travel). For New Zealand, data factors were obtained from the New Zealand Business Council for Sustainable development 'Emission Factors for New Zealand Businesses' for air travel and tool of trade, as per the Australian source for paper, and have been advised by their energy supplier for electricity. New Zealand brands included in this measurement: State, NZI, Swann Insurance, NAC.

Customer satisfaction index:

In Australia, this measures the end-to-end customer experience when enquiring, taking out, renewing or making a claim for direct personal insurance. Customer satisfaction levels are determined by a third party through telephone interviews with a random sample of customers contacted. During the previous year, there was a change in the survey provider; but only the customer satisfaction index for the retained provider was included (results for the six months to June 2006). In New Zealand, this is a measure of customer satisfaction with non-claims related contact. The survey is a random sample of customers who have had a non-claims related contact (e.g. requested a quote, changed their address, taken out a policy) within the last month. Satisfaction is measured by a third party survey where the percentage of customers rating 5, 6 or 7 on a 7 point scale are considered to be satisfied (7 = extremely satisfied and 1 = extremely dissatisfied).

communityhelp grants:

Cash grants given to community groups through the communityhelp grants program. Figures reported are inclusive of GST.

Dollar values:

Unless otherwise stated all dollar values listed in this report are based on Australian dollars. Where New Zealand dollars have been converted into Australian dollars an exchange rate of 0.87139 has been used. This is based on the average exchange rate for the 2006/07 year.

Electricity:

In Australia this includes metered electricity consumption for those sites directly owned or controlled by IAG (approximately 70% of all sites). Where metered data is not available, electricity use has been estimated based on an equivalent floor space model using consumption figures for similar known sites. For New Zealand, this includes metered electricity consumption for those sites directly owned or controlled by IAG in New Zealand (all sites).

NB: electricity data covers the period June 2006 – May 2007.

Employee engagement score:

Determined through six questions in the 'Your Voice' employee survey conducted by a third party. The survey assesses the extent to which employees consistently say positive things about working at IAG, want to stay with IAG and strive to achieve above and beyond what is expected of them. Participation in the survey is voluntary but is made available to all employees. For New Zealand, this includes the State, NZI, NAC, Swann Insurance and DriveRight brands.

Employees represented by unions:

The number of employees included within the headcount who are paid members of a union. In Australia, this only represents those employees that have paid for their union membership through payroll deductions.

FTE (full time equivalent):

FTE is a measure of the size of IAG's workforce that takes account of part time employees. Full time employees are given a value of one. The value for part time employees is based on their regular hours as a proportion of full time hours. Guests, casual employees and employees on extended leave are excluded from the figure.

Fuel consumption:

Petrol consumed by IAG's tool of trade fleet. Diesel use (Australia only) is not reported since it accounts for a very small proportion of overall fuel use (less than 0.1% of total Australian fuel consumption). No adjustments are made for any personal usage of the tool of trade vehicles.

Full time employees versus part time employees:

Percentage of full time versus part time employees included in headcount. Full time employees work 35 or 37.5 hours per week depending on their Enterprise Agreement. Part time employees work less weekly hours than the full time hours under their enterprise agreement. In New Zealand, full time employees work 37.5 hours per week and part time employees work less than 37.5 hours per week.

Funds for community investment:

This estimates direct financial support of community groups and programs, as well as indirect support to help promote and raise awareness of these community organisations (including commitments), plus salary costs and on-costs for employee volunteering hours recorded in the Human Resources systems. For Australia, this also includes direct IAG management and administration related costs. Figures reported are exclusive of GST.

In prior years, this measured direct financial support of community groups and programs, as well as indirect support to help promote and raise awareness of these community organisations, including corporate sponsorships.

Green electricity:

Green Power purchased by IAG. Green Power, which is supplied from Energex as part of a Department of Energy, Utilities and Sustainability Green Power program.

Gross written premium:

The total amount received by the Group from customers for the payment of their insurance policies.

Headcount:

The number of people employed by IAG, regardless of hours worked, excluding casuals and guests. In New Zealand, employees on a fixed term contract are also excluded.

Note: for Australia, the prior year definition excluded employees on a fixed term contract.

Indigenous employment:

Employees that identify themselves as indigenous employees via a diversity survey included in IAG's new employee starter kits and online diversity and Equal Employment Opportunity training.

Insurance margin:

Contribution to profit from underwriting and investment income on claims reserves as a percentage of Net Earned Premium.

Lost time injury frequency rate (LTIFR):

The number of work-related injuries resulting in a lost time injury, per million hours worked. A lost time injury is an injury that has resulted in at least one shift/day's absence from work and for which a workers' compensation claim has been lodged as at 30 June 2007. Million hours worked includes all scheduled hours, plus overtime less leave and also includes the hours worked by casual employees.

Male to female salary ratio:

The ratio is determined by dividing the average of male employees' annual FTE salary by the average of female employees' annual FTE salary. To obtain the average annual male FTE salary, individual male base salaries are equated to 37.5 hours and the total sum of these full time equivalent salaries is divided by total male headcount. The same applies to individual female salaries.

Net claims expense:

The amount paid out by the Group in claims during the year, as well as an estimate of how much is needed to pay on unsettled claims, plus claims handling costs such as legal and administrative expenses, less recoveries from reinsurers and other parties.

Net earned premium:

This is gross earned premium minus reinsurance expense.

Net profit attributable to shareholders:

The net result after allowing for income taxes and the share of profit owing to minority shareholders. The Group net profit attributable to shareholders is used in the Australian indicators only. However, New Zealand's contribution is measured as a percentage of net profit after tax.

Office paper consumption:

A3 and A4 office paper consumption as determined through an in-house ordering system using two separate suppliers. This excludes glossy paper. In New Zealand, this measures office paper consumption as determined through supplier invoices for paper ordered during the month.

Print paper consumption:

Print paper consumption consisting of commercially printed material (booklets, envelopes, brochures and customer documentation such as renewals and certificates of insurance).

Recycled commingled waste:

Recycled commingled waste is a measure of paper, cardboard and commingled material collected for recycling across Australia. In previous years, it consisted of waste collected from IAG premises and archived material recycled only. This year, the measure also included paper sent for secure destruction.

New Zealand figures included paper and cardboard recycled from most sites, whereas commingled waste was only collected from Auckland, Wellington and, from this year, Christchurch sites (brands include: State, NZI, Swann Insurance).

Return on equity:

Net profit attributable to ordinary shareholders as a percentage of the average equity of those shareholders.

Staff turnover:

Turnover percentage is the sum of the monthly turnover rates determined by dividing the total number of terminations by headcount each month. Termination includes all permanent and fixed term contract full time and part time employees but excludes casual employees and guests.

Women in executive management:

For Australia, this measures the total percentage of women on the IAG Executive team. For New Zealand, this measures the total percentage of women on the New Zealand Executive team.

Women in senior management:

Total percentage of females in senior management positions is determined by women in the position of Senior Manager, Head of and Executive roles as per IAG's organisational structure.

Workplace accidents:

The number of injuries accepted by the relevant workplace safety authority as work-related. [New Zealand - Accident Compensation Corporation (ACC)].

Workplace giving program:

The dollars contributed by staff through our payroll deduction scheme.

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