Insurance Australia Group

Insurance Australia Group Limited underwrites general insurance products and provides investment management services in Australia and New Zealand. It offers personal and commercial insurance products, including bicycle, comprehensive motor, commercial and motor fleet, commercial property and liability, construction and engineering, consumer credit, compulsory third party, directors and officers, extended warranty, farm, crop, livestock, home and contents, income protection, marine, veteran, vintage and classic car, boat, caravan, travel, life, professional indemnity, public and product liability, security, workers' compensation, motor vehicle, business, and rural and horticultural, as well as reinsurance. The company sells its products through branches and agencies, call centers, online facilities, brokers, agents, authorized representatives, and financial institutions; and third parties under the NRMA Insurance, SGIO, SGIC, RACV, CGU, ROLLiN, WFI, Swann Insurance, NZI, State, AMI, Lumley, and Coles Insurance brands. The company was formerly known as NRMA Insurance Group Limited and changed its name to Insurance Australia Group Limited in 2002. Insurance Australia Group Limited was founded in 1920 and is based in Sydney, Australia.

In 2004, there was speculation that IAG would merge with Australia's then largest insurer QBE Insurance, however IAG denied the merger. Speculation emerged and was denied again in 2006.On 10 April 2008, QBE proposed a takeover, with each IAG share being exchanged for 0.135 QBE shares plus 50 cents cash . 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 . 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 , 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 .

On 16 December 2013 IAG announced that it had agreed to purchase Wesfarmers Insurance underwriting businesses. The acquisition comprised companies trading under the WFI and Lumley brands, as well as a ten-year distribution agreement with Coles.

In 2015, IAG share price has fallen 9% since it reported its interim result. The insurer's net profit for the six months to December fell 10% to $579m due to intensifying competition and a jump in natural disaster claims. Disaster claims of $421m exceeded the company's expectations by $71m, mainly on account of $165m in claims following Brisbane's November hail storm – the worst seen in 30 years.

IAG's New Zealand business delivered a 26% rise in gross written premiums, though entirely on account of adding Wesfarmers' NZ-based operations. The underlying profit margin increased from 14.2% to 15.9% due to a period of few natural disasters but the company is still feeling pain from the massive 2011 Canterbury earthquakes.In June 2015, Berkshire Hathaway acquired a 3.7 percent stake in the group for a fee of around $388 million in a partnership aimed at reducing IAG's capital requirements.

Insurance Australia Group

Share

Contacts

Follow Us

Insurance Australia Group

Share

Contacts

Follow Us