Our strategy

Optimise our core insurance business while creating future growth options

At IAG, our purpose is to make your world a safer place: IAG’s purpose means that whether you are a customer, partner, employee, shareholder or part of the communities we serve, IAG exists to ‘make your world a safer place’. We believe our purpose will enable us to become a more sustainable business over the long term, and deliver stronger and more consistent returns for our shareholders.

Financial targets

IAG is focused on delivering through the cycle targets of:

  • Cash return on equity 1.5x weighted average cost of capital;
  • A dividend payout of 60 – 80% of cash earnings;
  • Top quartile total shareholder return; and
  • Approximately 10% compound earnings per share growth.

Strategic priorities

IAG has identified three key strategic priorities, supported by organisational capabilities, to deliver its strategy:

I. Customer – World-leading customer experiences:

Create a delivery platform that transforms customer experiences:

  • Better connect customers and automate processes, enabling IAG to reach more customers in a timely manner;
  • Develop an innovation approach which provides the ability to think differently and deliver quickly;
  • Embed cognitive capabilities and artificial intelligence that anticipate customers’ needs; and
  • Use data to power decision-making, allowing IAG to better understand its customers.
II. Simplification – Simplified, modular and lower cost operating model:
  • Reduce organisational complexity by consolidating technology platforms, harmonising products, simplifying processes and systems, and executing the technology strategy;
  • Leverage operational partners to optimise the operating model and drive scale economies across the value chain; and
  • Improve allocation and maximise utilisation of the preferred repairer network to reduce average claim size.
III. Agility – An agile organisation distinguished by innovation, speed and execution skills:
  • Create a disciplined approach to IAG’s management and leadership, including building stronger role clarity and introducing agile ways of working;
  • Build a talent pipeline based on the skills required to deliver IAG’s strategy and help IAG people transition to the future of work; and
  • Be recognised as a purpose-led organisation that shapes its internal and external environment.

Operational scorecard

A range of activities linked to our strategic priorities:

Customer

2018 activities
  • Applied the customer segmentation model to inform brand strategy, marketing and customer journey design
  • Digitised key customer journeys including redesigning the motor claims process
  • Consolidated IAG’s data asset using open source technologies and received the Red Hat 2018 Innovation Award
  • Deployed world-class pricing capability using machine learning and real-time pricing models, across core personal lines portfolios
2019 priorities
  • Apply customer behavioural analysis to prioritise investment decisions that drive customer advocacy
  • Transition the data platform onto a scalable, flexible and cost-efficient cloud capability that powers decision-making
  • Embed cognitive capabilities such as chat bots and computer visioning across the organisation
  • Continue digital transformation through the development of application programming interfaces (API), scaling of digital infrastructure and use of cloud

Simplification

2018 activities
  • Embedded single Australia Division operating structure
  • Completed Australian personal motor and home lines claims component of systems consolidation
  • Continued transition of targeted activities to operational partners
  • Embedded operational partnering excellence framework
2019 priorities
  • Continue consolidation of core technology platforms and decommissioning of redundant systems
  • Complete transition of targeted activities to operational partners
  • Progress review and delivery of optimised repair model

Agility

2018 activities
  • Deployed Leading@IAG program, linking purpose and strategy to individual accountability and performance
  • Increased employee advocacy score by 18 points
  • Launched Future ME program to empower employees to build their knowledge and preparedness to participate in the workforce of the future
  • Continued investments through Firemark Labs and partnerships to launch products and solutions that deliver on IAG’s purpose
2019 priorities
  • Strengthen ways of working, leadership and people frameworks to create clarity, improve productivity and evolve skills to be successful in the future
  • Continue to develop partnerships, products and shared value programs that drive safer communities and deliver on IAG’s purpose: we make your world a safer place