OPERATING PERFORMANCE
OPERATIONS
Operations is responsible for all the activities that support and drive IAG’s insurance businesses, including technology, claims, procurement and supply chain. It is also responsible for IAG’s operational partnering initiatives and the implementation and governance of our optimisation program.
OPTIMISATION PROGRAM
IAG’s optimisation program covers a number of initiatives designed to simplify our business and reduce IAG’s controllable expense base by at least $250 million – or 10% pre-tax by the end of the 2019 financial year – while significantly improving productivity and our customers’ experiences.
The program has three core pillars: effective partnering; core systems consolidation; and supply chain optimisation.
EFFECTIVE PARTNERING
Operations manages the operational partnering program which outsources and offshores some specific activities to global service suppliers who have superior business scale and expertise.
Activities that have been be moved to off shore partners include accounts payable and accounts receivable (Australia and New Zealand); digital classification (Australia); payroll (Australia); premium administration and credit (Australia); and digital customer support (webchat Australia). More partnering activities will be added in the 2018 financial year.
Operations has implemented an Operational Partnering Excellence framework to build organisational capability and ensure we achieve the best outcome. It is also establishing an automation centre of excellence for the Robotic Process Automation skills which are used in areas such as accounts payable.
SYSTEMS CONSOLIDATION AND SUPPLY CHAIN OPTIMISATION
This year, Operations began to consolidate and simplify IAG’s core technology systems across Australia and New Zealand, including using the proven Guidewire platform. It is now moving all of IAG’s claims operations onto Guidewire’s ClaimCenter.
The division completed a refreshed technology strategy and roadmap that will provide end-to-end digital use across the value chain; simplify technology; and create and embed an aligned operating model across all technology areas.
It also introduced reforms to procurement and supply chain practices, including consolidating suppliers and negotiating better rates; increasing the use of preferred partners in property and motor claims; and implementing an IAG-wide procurement policy, procurement analytics and a buying portal with improved transparency of major supplier contracts.
The division has overseen the consolidation of IAG’s property footprint and increased moves to flexible working practices, which are helping to reduce the amount of o ice space we lease.
SIMPLIFICATION
On 19 July 2017, Operations became part of Australia Division, along with the Consumer and Business divisions. The new single Australia Division simplifies IAG’s operating model by centralising accountability for the customer, product, distribution and operations functions for IAG’s Australian brands.
In a further step towards simplification, on 1 August 2017 we consolidated our nine Australian general insurance licences to two.