2011 INVESTOR BRIEFING

Transcription

1 2011 INVESTOR BRIEFING 14 June 2011 ABN

2 4 AUSTRALIA INTERMEDIATED () Accelerating growth in home markets PETER HARMER CHIEF EXECUTIVE OFFICER 30

3 BUSINESS OVERVIEW DIVERSE PORTFOLIO MIX Large SME portfolio Australia's largest regional and rural insurer Growing capability in the corporate market Major provider of workers' compensation services PRODUCTS CUSTOMER SEGMENTS Commercial short tail Personal lines Commercial long tail Workers' compensation SME Consumer Corporate Other 31

4 BUSINESS OVERVIEW DIVERSE DISTRIBUTION FOOTPRINT ~8% of total Australian general insurance market ~14% of Australian intermediated general insurance market DISTRIBUTION CHANNELS BRANCH NETWORK GEOGRAPHIC SPLIT Brokers & authorised representatives Financial institutions & affinity Motor dealers VIC NSW/ACT QLD WA SA TAS NT 32

5 CURRENT MARKET ENVIRONMENT PRICING REMAINS PATCHY Personal lines SME Corporate Workers Compensation* Rate movements Key drivers Catastrophe costs Claims inflation Solid capacity Increasing competition Recent catastrophe events Increasing claim numbers Average claim costs growing faster than wages * Risk states only 33

6 CURRENT MARKET ENVIRONMENT A CHANGING LANDSCAPE Natural perils Frequency and scale of events has increased Increasing claim costs Reinsurance costs Reinsurance costs expected to rise Rate increases necessary Regulation & legislation Higher level of public and political scrutiny Review and Inquiry following the floods Commitment to launch a flood product Electronic platforms Brokers investing in technology to drive efficiencies 34

7 DISTRIBUTION TECHNOLOGY EVOLVING TO DRIVE EFFICIENCIES Marketplace hubs lack of automated contestable quoting has led to limited efficiency benefits Major brokers now developing their own contestable quoting platforms to drive internal efficiencies Underlying sales process has not changed selectively participating where differentiated offering can be achieved Difficult to automate multiple quotes Intermediary 1 Traditional landscape Insurer 1 Insurer 1 s system Quoting automation driving internal efficiencies Evolving landscape Insurer 1 Insurer 1 s system Intermediary 1 s system Marketplace Interface Insurer 2 Insurer 2 s system Intermediary 1 Intermediary 1 s system Insurer 2 Insurer 2 s system Intermediary 2 Insurer 3 Insurer 3 Intermediary 2 s system Insurer 3 s system Insurer 3 s system 35

8 OUR ACHIEVEMENTS IMPROVED PERFORMANCE DEMONSTRATES UNDERLYING TURNAROUND H08 2H08 1H09 2H09 1H10 2H10 1H11 Reported Insurance Result Underlying Performance Underlying Performance: excludes reserve releases, actual natural peril costs and credit spreads, but includes budgeted natural peril costs 36

9 OUR ACHIEVEMENTS STRATEGIC DRIVERS BEHIND THE TURNAROUND Underwriting Claims Customer & brand Pricing discipline and risk selection Reducing indemnity and claims handling costs Focused customer value propositions and building brand awareness Business efficiency Transformation of business processes and supporting technology People strategy Developing capability and driving results 37

10 FOCUS FOR THE FUTURE LEADER IN INTERMEDIATED INSURANCE 38

11 STRATEGIC THEMES CHANNEL MANAGEMENT GROWTH CLIENT-CENTRIC CULTURE Channel sales strategy & planning Channel sales Channel sales processes People & skills Technology & tools Market/intermediary segmentation Intermediary value proposition Intermediary service level Channel economics Portfolio Sales methodology Pipeline Sales forecasting Performance Key account Sales channel operations Manage relationships Understanding intermediary needs Account Account planning Opportunity identification Opportunity qualification Solution development Winning/delivery Intermediary care and servicing Organisational, structure, roles Talent optimisation Recruitment and selection Competency Incentives and reward CRM solutions MIS Channel Management Framework

12 STRATEGIC THEMES CUSTOMER AND MARKET INSIGHTS Customer-centric perspective Further differentiate offering Customer and market insights Refine value drivers and customer segments Refine Customer Value Propositions Design & deliver customer experiences Monitor Intermediaries End customers Competitors Apply CVP to: Product design Pricing Processes & systems Distribution Communications People Continuous feedback loop 40

13 STRATEGIC THEMES UNDERWRITING EXPERTISE Managing latent & emerging risks Pricing discipline Strategic portfolio Underwriting rigour & risk selection UNDERWRITING EXPERTISE Portfolio strategy & planning Underwriting framework Underwriting competence Portfolio performance Reinsurance strategy 41

14 FOCUS FOR THE FUTURE CLEAR PRIORITIES Double digit insurance margin Commitment to core strategy Focus on profitable growth Expense base Three years into five-year strategy Solid platform to build on Greater clarity around future areas of focus and required execution Sales led relationship-based account Customer and market insights Active portfolio Continue to monitor the pipeline of opportunities Profitability supported by expense base reductions: Administration expenses Claims handling expenses Indemnity costs 42

15 OUTLOOK FURTHER IMPROVEMENT EXPECTED Short term Impacted by significant catastrophe costs Clarity still emerging around impact of catastrophe environment on premium trends Long term Continued execution of core strategy to drive improved underlying performance Focus on profitable growth Further progress in underlying performance 43