ASSURANCE STATEMENT

Independent review report to IAG on its Sustainability Report 2005

Introduction

We have been engaged by IAG to review selected performance data (the Performance Data) reported in the IAG 2005 Sustainability Report (the Sustainability Report), available on IAG's website, and reported in the concise IAG 2005 Sustainability Report in the section titled "Key Indicators" on pages 7 and 8, for the year ended 30 June 2005.

Scope

The Sustainability Report and management responsibility

The management of IAG are responsible for the preparation of the Sustainability Report and the information and assessments contained within it, for determining IAG's objectives in relation to sustainability performance, and for establishing and maintaining appropriate performance management and internal control systems from which the reported information is derived. Management's assertions about the effectiveness of the performance management and internal control systems are included in a separate letter we have received from management.

Review approach

We have conducted an independent review of the following Performance Data reported in the Sustainability Report, and reported in the concise IAG 2005 Sustainability Report in the section titled "Key Indicators" on pages 7 and 8 for the year ended 30 June 2005, for IAG's Australian operations unless otherwise stated:

  • Number of risks in force for personal lines classes of business
  • Number of policies in force for commercial classes of business
  • Customer satisfaction levels
  • Claims satisfaction levels
  • Number of level 2 and level 3 customer complaints
  • Headcount
  • Percentage of full-time employees vs part-time employees
  • Staff turnover
  • Male to female annual salary ratio
  • Percentage of women in senior management positions
  • Absenteeism
  • Employee engagement
  • Number of employees who identify themselves as indigenous Australians
  • IAG population (employees) aged 25-34
  • Lost Time Injury Frequency Rate
  • Number of employees trained in first aid
  • Number of fire wardens
  • Funding of the Occupation Health and Safety (OH&S) department
  • CO2 emissions
  • Electricity use
  • Office paper consumption
  • Print paper consumption
  • Tool of trade fuel consumption
  • Recycled commingled waste
  • Air travel
  • Number of employee volunteer hours
  • Funds for community investment
  • Charitable contributions as a percentage of net profit after tax
  • Net Earned Premium as used to determine contribution to GDP

The percentage of the Australian Labour Force aged 25-34, reported on page 7 of the concise Sustainability Report and obtained by IAG from the Australian Bureau of Statistics, was not included in our review.

There are no generally accepted standards for the preparation, publication or review of sustainability performance data. IAG applies its own definitions for reporting the Performance Data ("the Criteria"), a concise version of which can be found on IAG's website (at the address www.iag.com.au/sustainable/reports/2005/). The selection and suitability of the Criteria is the responsibility of management and our review did not include an assessment of the adequacy of the Criteria. Further, the internal control structure which management has established and from which the Performance Data has been derived, has not been reviewed and no opinion is expressed as to its effectiveness.

Our review was conducted in accordance with the International Standard on Assurance Engagements ISAE 3000 "Assurance Engagements other than Audits or Reviews of Historical Financial Information" issued by the International Auditing and Assurance Standards Board, and with Australian Auditing Standards AUS 108 "Assurance Engagements" and with AUS 902 "Review of Financial Reports".

We performed review procedures in order to state whether on the basis of the review procedures described, anything has come to our attention that would indicate the Performance Data has not been presented fairly in accordance with the Criteria established by management.

We formed our statement on the basis of the review procedures performed, which were limited primarily to:

  • enquiries of company personnel; and
  • analytical procedures applied to the Performance Data.

The procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Independence

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe the Performance Data reported in the Sustainability Report for the year ended 30 June 2005 has not been presented fairly in accordance with the Criteria established by management.

KPMG
Dr Andries B Terblanché
Partner
Sydney, 25 October 2005

For a controlled version of the IAG Sustainability Report 2005 please download IAG Sustainability Report 2005 PDF . (1,814 kb)