SUMMARY OF PERFORMANCE
ASIAN OPERATIONS
Justin Breheny
CEO, Asia
Our Asian division was formed during the year with responsibility for overseeing our growing portfolio of investments in the region.
We took a number of steps during the year in line with our goal to establish an Asian foothold, with our Asian businesses contributing to the Group’s gross written premium and underwriting profits for the first time.
Our presence in Thailand expanded with the purchase of a general insurer in July 2005, renamed NZI Thailand, and we increased our long-held stake in Safety Insurance to 96%.
Together, these two businesses provide IAG with the fourth-largest share of the fast growing Thai insurance market, with a presence in both personal and commercial insurance.
In March 2006, we purchased a 30% stake in AmAssurance, Malaysia’s second-largest motor insurer. A part of AMMB, one of Malaysia’s largest banks, AmAssurance has an extensive distribution network, with a one-stop offering for financial services products to distributors, and bancassurance opportunities.
In June 2006, we agreed to acquire a newly formed Lloyd’s managing agency and specialist Asian syndicate, to support the development and management of our expanding Asian portfolio allowing us to leverage reinsurance opportunities in the region.
We also established a regional office in Singapore, from which we oversee our existing interests in Malaysia, Thailand and Singapore, and search for new opportunities in the region.
In China, the Group’s roadside assistance company, CAA, continued to focus on creating a high performance culture and enhancing profitability through disciplined cost management, innovative product design and improved customer service.
In line with the Group’s desire to reduce risk in the community, CAA continued to roll out its road safety campaign in conjunction with Tsinghua University. The campaign was designed to raise community awareness on topics such as wearing seat belts, braking distances, the use of child restraints and capsules, and the effects of drink-driving.
During the year, we progressed our plan to acquire 24.9% of China’s second-largest insurer. Upon completion, this will provide us with an entry into one of the world’s fastest growing general insurance markets.
In each of the countries in which we operate, we are building strong relationships with the prudential regulators and industry bodies, that enable us to provide valuable input into market and regulatory reform.
LOOKING FORWARD
We will continue to build our portfolio
of Asian assets, both through further
acquisitions and organic growth
opportunities. Continued growth in market
insurance premiums in excess of 10%
per annum is expected in these markets,
given the current low levels of penetration
coupled with natural economic growth well
above that of more mature markets.
Working closely with our business partners, we will focus on initiatives which leverage IAG’s world class skills in underwriting and claims management as well as our partners’ local knowledge and distribution capabilities, to identify and scope opportunities for growth.
A NEW BEGINNING IN THAILAND
Early in 2006, IAG marked the renaming of its new Thai business, NZI Thailand, with an official ceremony in Bangkok. The CEO of NZI Thailand, Chris Dooley, said the new brand would quickly gain recognition, and would benefit from being part of the broader IAG stable of businesses.
“The NZI brand has a long tradition which dates back to 1859. It has been used once before in the Thai market, as well as being the brand for New Zealand’s leading commercial insurer, also part of the IAG stable,” Chris said.
“Being part of IAG provides the opportunity for NZI Thailand to draw on the world class capabilities of the Group in underwriting and claims management.
We are already sharing product and technology information and have seen some improvements.”
IAG’s CEO Asia, Justin Breheny said the acquisition of NZI Thailand was an important step in the Group’s strategy to build a presence in Asia.
“With a population of more than 60 million people and strong forecast economic prospects, we long ago identified Thailand’s general insurance market as having solid growth potential,” Justin said.
“NZI Thailand is our second acquisition there – we have been working closely with the team at Safety Insurance since 1998 and are now pleased to be working just as closely with the team at NZI Thailand.”
IAG Annual Report 2005
IAG Annual Report 2004
www.iag.com.au
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