STAKEHOLDER ENGAGEMENT

As a service company, we work to provide consistent, reliable and excellent service to all our customers.

We conduct regular satisfaction surveys with our customers across all our business lines. In the Australian Personal Lines business we conduct over 25,000 interviews with customers per year who have had recent interactions with our operating brands, either dealing with an insurance policy or making a claim, and we publish a 'Customer Satisfaction Index' score that summarises the feedback. This year's score can be found in the table of indicators. A similar process is undertaken in our New Zealand businesses.

Through our Workers' Compensation business, we receive ongoing formal feedback from regulators about our products and services. This feedback directly affects the profitability of these portfolios. We also receive feedback from employers, medical professionals and injured workers. In 2007, for the first time, injured workers in Victoria whose claims had been rejected were included in these surveys. We have also introduced a new system to measure customer feedback in our NSW Workers Compensation business.

For CGU, our intermediated business in Australia, feedback is sought on an ongoing basis from intermediaries via external surveys (e.g. NIBA). IAG publishes the results of customer satisfaction data every six months in the IAG Investor Report.

The wealth of data that IAG collects regarding weather patterns, claims and accidents is used to benefit our customers at every stage of customer contact. The Company's online tools to assess the safety and environmental performance of cars and home products are just one way in which we help our customers reduce their own risk.

We keep our shareholders informed through regular announcements to the Australian Stock Exchange, which are relayed through an email messaging service to shareholders who have registered to receive them. They are also posted on the IAG website.

Half yearly results briefings and the Annual General Meeting (AGM) are webcast with archived copies available on our website.

We meet any obligations to communicate with our shareholders and, due to the size of our register and the cost involved in communicating directly to our shareholder base, we seek media coverage of important events if we need to deliver information. We encourage shareholders to use email to reduce paper usage and costs of postage.

We also communicate formally with shareholders through annual and half year reports and at AGMs, where they are encouraged to ask questions of the Board.

Shareholders can also submit written questions to the Company's auditor relating to the conduct of the audit and the content of the auditor's report to be considered at the AGM. The Company's auditor attends the AGM to answer the qualifying questions. A list of questions is available at the AGM and the answers posted on our website after the meeting.

All our share registry functions are performed by Computershare Investor Services, which is a dedicated IAG shareholder information line. We also have a Shareholder Centre on our website.

We have a number of formal and informal channels available for employees to provide feedback and give input. These include Staff Consultative Committees, CEO email boxes and annual employee engagement surveys. Our employees also have the opportunity to talk about their experiences and the work they do through internal publications and videos. In addition to this, managers hold regular performance and career planning discussions with our employees.

Many employees also participate in our annual planning sessions, during which our strategy is communicated and team goals and plans are established.

IAG maintains a dedicated Government and International Relations unit. Through this unit we are actively involved in the public policy process. We participate in parliamentary inquiries; make submissions and research policy issues to provide insurance protection and security to the community.

All public submissions to Government are available to view or download. In 2006, IAG signed a Sustainability Compact with the NSW State Government. The Compact includes commitments by IAG to develop a series of training and practical initiatives relating to environmental sustainability.

Our customers often see IAG suppliers as key representatives of the Company's operations. For that reason we seek out suppliers who share our values and philosophies. IAG's Supplier Selection Guidelines in Australia aim to ensure that our suppliers share the Company's commitment to sustainability. The guidelines are supported by supplier performance reporting for strategic suppliers, which cover areas such as employee relations and environmental commitment. Currently in Australia 23% of our national 'strategic' suppliers (accounting for 49% of financial spend) have sustainability criteria built into their performance plans. We are working on an ongoing basis to expand the coverage of suppliers who have these criteria built into their performance plans. In New Zealand we have similar requirements, and recently over 390 suppliers in New Zealand were contacted to explain the company's position on sustainability and to inform them that we will be working in partnership to develop sustainability plans.

Our preferred supplier code of practice in Australia also outlines our responsibility to our supply chain partners, including their rights to dispute resolution and our people's responsibility to interact with our preferred suppliers fairly.

We recognise that the scale and diversity of our supply chain relationships across our international businesses makes consistent application of sustainability criteria in supplier management a significant challenge. We are continuing to assess and address this challenge on an ongoing basis.

Our consultation process with the Finance Sector Union (FSU) is detailed in the IAG Enterprise Agreement 2003 (Agreement). Under the Agreement, we consult with the FSU regarding workplace change programs impacting on employees, when positions are being made redundant and/or employees are being retrenched. FSU representatives are invited to address new recruits at our induction programs. In accordance with the Agreement's grievance procedure, they are recognised as an employee representative.

This process is similar in New Zealand and detailed in the respective union collective employment agreements.

Representatives from partner organisations are regularly invited to IAG functions and forums to share their expertise.

IAG also engages with community organisations, government agencies and other businesses to deliver risk reduction research and advocacy programs.

In-house teams manage our day-to-day relationships with our partner organisations in Australia and New Zealand.

We encourage our people to take part in public debate on areas of relevance to our core business. Our managers regularly speak at seminars, conferences and public hearings.

By taking an active role on specific issues relevant to our business, we believe we are demonstrating how seriously we take our role as Australasia's leading general insurance group.