IAG shaves costs by merging Australian units under new CEO
General insurer Insurance Australia Group (IAG) has restructured its domestic business with the creation of a single division under current chief operating officer Mark Milliner.
As CEO Australia, Milliner will continue to drive the ongoing simplification and optimisation of IAG’s operating processes and systems.
The current chief executive of the Australian consumer division, Anthony Justice, has decided to leave IAG.
The company expects its optimisation programme will reduce gross operating costs by an annual run rate of at least 10 percent, or $250 million pre-tax, by the end of FY19.
It stated that the new structure will simplify its operating model by bringing together the former Australian consumer, business, operations and satellite divisions. It will centralise accountability for the customer, product, distribution and operations functions for IAG’s Australian brands, which include NRMA Insurance, CGU, WFI, SGIO and SGIC.
According to IAG managing director and CEO Peter Harmer, the new Australia division is a logical next step for IAG and will ensure the company maintains its leadership position in its key Australian market.
"Creating a simpler, more efficient Australia Division takes advantage of the scale of our business and the expertise of our people so we can respond more effectively to rapidly changing customer needs and expectations," Harmer said.
"The new structure will make it easier for people to do business with us, boost our productivity and allow us to deliver great experiences to our customers today, and into the future. It will allow us to better leverage our investment in new and emerging technologies to further improve the customer experience and create a successful and enduring company."
Harmer added: "Mark’s depth of experience, passion for our customers and people, and his appreciation of the role of insurance in making communities and individuals feel safer, make him the ideal person to lead this business and achieve our purpose to make your world a safer place.
"Anthony has been a valued member of my leadership team and has made a significant contribution to our business over the past six years, particularly through his leadership of the Australian Consumer Division. We will miss his passion and commitment, and wish him every success for the future."
The company further announced that the chief executive of the Australian business division, Ben Bessell, will remain a member of IAG’s group leadership team and becomes executive general manager business distribution, reporting to Milliner.
Following the creation of the Australia division, IAG will report financial results for the following segments: Australia, New Zealand and Asia. In addition, IAG will provide further segmentation of the Australia division into Australian Consumer and Australian Business, consistent with current practice.
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