DESIGNS ON THE FUTURE OF CARS

For almost 20 years, IAG’s Industry Research Centre has been working with car manufacturers to help improve the repair costs, safety and security of cars on our roads. When Holden Australia began work on its 2006 model Commodore five years ago, it called on IAG to provide input into how Holden engineers could improve design aspects to reduce repair costs and improve anti theft security. Similarly, IAG has provided design input into the Subaru Liberty, Ford Territory and the new 2005 Mitsubishi 380.

TACKLING ROAD INJURIES HEAD ON

Around 75% of head injuries are sustained in car crashes, and severe head injuries are a leading cause of death and disability for people in car crashes. In March 2005, NRMA Insurance and NRMA CareFlight launched a world-first medical trial, the Head Injury Retrieval Trial (HIRT), which aims to improve recovery outcomes for people who sustain head injuries on the road. Under the trial, specialist doctors and paramedics are sent by helicopter to assist people identified with severe head injury by providing intensive trauma care at the scene, rather than waiting until the patient arrives at hospital. NRMA Insurance is contributing $11.2 million to fund the trial over three years.

MEASURING THE SUSTAINABILITY OF OUR PERFORMANCE

Measuring and reporting on our financial, social and environmental performance is an integral part of delivering on our strategy to manage our business successfully for the long term.

To supplement the financial reporting contained in this annual report, IAG will release its second Sustainability Report later this year. Our inaugural report, published in November 2004, is available at www.iag.com.au.

Our Sustainability Report provides additional information on our performance against social and environmental indicators, such as our efforts to improve the diversity within our workforce, make our communities and roads safer, and reduce our greenhouse gas emissions.

Key achievements during the year in these areas are listed below.

Sustainability strategy

• IAG has been included in the FTSE4 Good Global 100 index (designed to measure the performance of companies that meet globally recognised corporate standards).
• IAG scored 81.4%, up from 65.5% in 2003, in the St James Ethics Centre Corporate Responsibility Index, ranking exceptionally well in the areas of corporate strategy and values, leadership, stakeholder engagement, community management and OH&S.
• IAG was awarded the United Nations Association of Australia ‘Triple Bottom Line’ Award for the CGU Risk Radar, a tool that helps smash repairers self-assess their business against environmental, health and safety standards and develop an action plan to improve the safety and environmental performance of their workshop.

For our customers

• The Risk Radar product is being rolled out to industries such as hospitality, motor fleet and motor trades.
• IAG’s reversing visibility index for cars has been updated.

In the workplace

• IAG was awarded Employer of Choice for Women status by the Equal Opportunity for Women in the Workplace Agency.
• IAG’s career development process ‘PATH’ was rolled out across the Group, helping employees to map out a fulfilling career with the aim of driving engagement and motivation.
• The implementation of an online OH&S reporting process for both accidents and incidents has recorded an increase of IAG’s incident to claims ratio from 3.7 to 7.1 indicating a proactive safety reporting culture by employees. The technology allows managers to respond quickly and take preventative action where appropriate.

In the community

• The 2005 communityhelp grants programme has awarded grants to 150 community groups with a total of more than $530,000 going toward community projects.
• IAG launched ‘Insurance Basics’, an education programme which helps the community learn more about insurance – how it works, how premiums are priced, and how to reduce risk on the road, in the home and in the workplace.
• IAG and its employees donated about $751,000 to victims of the Asian Tsunami. This included employee fundraising, IAG matching and corporate donations.

In the environment

• IAG was appointed to the Steering Committee of the United Nations Environment Program Finance Initiative, aimed at promoting environmental and social issues in the finance sector.
• IAG now has 126 hybrid vehicles, which are more fuel-efficient and less polluting, in its tool of trade fleet.
• IAG has powered 6.2% of its operations through the use of Green Power, which is energy derived from renewable sources.

While these achievements highlight our progress, we recognise we have a long way to go to ensure we hit our targets. For example, a major challenge is how to reduce our ecological footprint while expanding our business. We are yet to achieve our environmental targets, but remain committed to an overall goal of reducing the Group’s CO2 emissions.