An important part of our sustainability as a business is our relationship with our stakeholders.
Stakeholders are the individuals or groups which have a direct interest in, and influence on, IAG's success, as well as those individuals or groups that our operations affect.
Effective stakeholder engagement continues to be a key strategic priority for IAG as it informs our corporate strategy and the strategies of our operating businesses. It is embedded in our Group strategy, and detailed as an explicit priority, reflecting our commitment to be accountable to those that we have an impact on or who affect us. It is about being inclusive, through the on-going identification of all of our stakeholders; ensuring that we evaluate all issues in a consistent risk management framework, identified through assessment of our impact on them and their impact on us; and ensuring that we respond in a way that meets the needs and concerns of our stakeholders.
IAG is a diverse group and has a broad range of stakeholders, including our customers, our workforce and our community. IAG operates a devolved model which means that responsibility for engagement with and management of all of our different stakeholders is assigned throughout the organisation at both a Group and divisional level, to those areas or people closest to the stakeholder. We believe that this puts us in the best position to engage with and respond to stakeholder feedback.
We engage directly with stakeholder groups to understand their expectations. This engagement with our stakeholders allows us to understand and respond to their issues and feedback. We are clear about who our stakeholders are, focusing on how we might best engage with them. The identification of stakeholders is a 'live' process with each business responsible for assessing the operating environment regularly to ensure that we understand who our stakeholders are.
Further formal procedures are detailed in the stakeholder information below.
Engagement is managed across the Group, focusing on:
- Gauging stakeholder expectations;
- Identifying and acting on the gap between those expectations and reality;
- Educating stakeholders on our business, how it operates, and what we aim to achieve;
- Taking on board feedback from our stakeholders, to inform our strategy and internal decisions;
- Continuous monitoring of changing stakeholder views and needs; and
- Maintaining a relationship of mutual respect, building credibility and earning trust.
Each division within IAG is accountable for demonstrating how they are engaging with their stakeholders. How this feedback feeds back into our business will depend on the stakeholder and nature of the engagement with them.
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Customers
We create the most value when we are close to our customers. IAG's devolved model provides autonomy and accountability to our operating businesses, ensuring decision making is as close to the end customer as possible. This allows our businesses to act quickly to meet the needs of customers, giving them control over the levers needed to execute their strategies and manage performance within IAG's overall framework.
Each division tailors its customer engagement to the needs of its customers. We engage with our direct customers via customer satisfaction surveys, in the contact we have with customers when they take out or renew a policy, or make a claim, as well as in focus groups. For example, our Direct Insurance business initiated Customer Experience days for its managers to enable them to hear directly from their customers. This feedback is being used to inform product development and services. We also have a robust complaints management process. This ensures that all customer complaints are heard, managed and escalated as appropriate.
IAG's key area of expertise is risk assessment and management, and we share this expertise with the stakeholders through different channels. For example, through our operating brands, such as NRMA Insurance, we educate customers on how to prepare for natural disasters, and how to ensure the impact is on them of such events is limited as much as possible.
For intermediaries, we have dedicated managers that facilitate ongoing dialogue through account management models, which are aligned by channel, as well as tailored intermediary surveys.
Through our workers' compensation businesses, we also build relationships with injured workers and their employers, facilitating two way engagement.
More customers are choosing to interact with us through non-traditional channels, for example online, and we are committed to giving customers forums which suit them. For example, our on-line insurer, The Buzz continues to engage with customers through a range of online tools, including buzzexchange (www.thebuzzexchange.com.au), an online community which allows people to share their views on insurance.
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Our People
Our people deliver on the promises we make to our customers, shareholders and the community at large. That's why engagement with our people is critical.
Employee engagement is driven through an open and honest dialogue with our employees. We engage through both formal and informal channels including team, senior manager and divisional meetings, an annual engagement survey, employee focus groups, email bulletins and regular performance feedback and career planning sessions. Employees are able to report any issues affecting the quality of our workplace through a number of channels. This includes talking to their direct manager, using a dedicated help line for issues including discrimination, recruitment and staff development, or using our intranet mailbox for reporting and managing compliance incidents.
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Unions
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. There are also specific consultation provisions dealing with situations when positions are being made redundant and/or employees are being retrenched.
IAG representatives meet with the FSU on a regular basis to discuss any issues that may impact on employees who are FSU members. In addition, FSU representatives are invited to address new recruits at our induction programs and may assist employees in accordance with the grievance procedure contained in the Agreement.
These processes are similar in New Zealand and detailed in the respective union collective employment agreements.
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Investors
As well as institutional investors, IAG has one of the largest retail investor bases in Australia, with around 835,000 retail shareholders.
Our shareholders clearly have an interest in our financial success, as well as the ability to shape that success through their investment decisions.
We engage in and encourage dialogue with all shareholders, through a variety of formal and informal channels including:
- Half and full year results, web-cast via our website;
- Investor reports;
- Annual General Meeting - while we encourage shareholders to attend, we web-cast the AGM for those who are unable to do so;
- Annual Review and Report;
- ASX announcements, also posted on our website;
- Investor strategy days;
- Investor road-shows following half and full year results announcements;
- A shareholder centre on our website that provides up-to-date and relevant information;
- One on one meetings with shareholders held throughout the year; and
- A dedicated investor relations mailbox for retail investors.
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Government and regulators
We engage with governments on a number of areas of policy, including regulation and prudential supervision, consumer protection and taxation. In addition to representing our own and our stakeholders' interests, we provide support in a range of ways, from writing statutory insurance classes such as compulsory third party, to helping ease the strain on government services after a natural disaster by looking after our customers.
IAG maintains a dedicated Government and Industry Affairs unit, and our operating businesses are also actively involved in the public policy process. We participate in parliamentary inquiries and 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.
As an international group, we engage with governments in Australia, New Zealand, the UK, and across Asia. We also engage with regulators, who impose and monitor capital and other requirements and minimise the likelihood of insurer failure through a minimum capital requirement.
In Australia we are in continual dialogue with:
- The Federal and State Governments;
- Federal regulators, such as Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and Australian Competition and Consumer Commission (ACCC); and
- Statutory scheme regulators such as WorkCover Authority and relevant motor vehicle third party liability regulators.
In New Zealand, we have contact with the national government, as well as the New Zealand Securities Commission and the Commerce Commission and the Ministry of Economic Development.
In Asia, IAG has ongoing relationships with regulators in the countries in which we operate, including the Insurance Regulatory and Development Authority (India), the Ministry of Finance, Office of the Insurance Commission (Thailand), Bank Negara (Malaysia), Monetary Authority of Singapore (Singapore) and China Insurance Regulatory Commission (China).
In the United Kingdom IAG engages with the Financial Services Authority and Lloyd's of London.
IAG engages with different levels of Government and other key stakeholders on a broad range of issues, including:
- The inquiry into flood insurance;
- Tax reform, to reduce the cost of insurance, thereby combating the issue of non-insurance and under-insurance and making the community more resilient after disaster strikes; and
- Competition and consumer issues.
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Business and non-government organisations and industry bodies
Participation and involvement in business organisations and industry bodies is encouraged where relevant for the Group. For example, we are actively involved with the Insurance Council of Australia, Business Council of Australia (BCA), the World Business Council for Sustainable Development and the Geneva Association.
We are also engaged with rating agencies, which influence the availability of capital, cost of capital and our ability to do business with sophisticated customers through credit ratings which reflect the underlying credit position.
Our employees and the business as a whole are involved in a number of business
organisations and industry groups. Where relevant and appropriate, 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.
IAG continues to be a signatory to the United Nations Environment Program Finance Initiative and a member of the World Business Council for Sustainable Development, as part of our commitment to sustainable development stewardship.
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Community
Insurers are part of the front-line response to natural catastrophes, so we are well placed to help the community after disaster strikes. But it's also important to help communities adapt, and become more resilient in a world in which severe weather events will become increasingly common. There is a clear benefit to both us as an insurer, through reduced claims costs, as well as to our customers and the community through less damage to their assets.
Suppliers
Our suppliers enable us to provide a service to our customers. Our suppliers are therefore crucial to our ability to help customers recover after a claim, through providing smash repairs, building services, whitegoods, medical treatment and a range of other services.
The management of supplier relationships sits with the businesses which are closest to them, with only some procurement located centrally. Both formal and informal channels exist to manage these relationships within our Supplier Guidelines (19kb .pdf).
Formal channels include:
- Contract re-negotiation;
- Quarterly performance report feedback;
- Monthly KPI meetings; and
- Specific sustainability reporting queries/feedback;
Informal channels include:
- Ad hoc queries; and
- Day-to-day contact.
We aim to establish strong relationships with our suppliers and facilitate a two-way dialogue. This means we can anticipate issues before they occur, and address them quickly if they do.
We take a partnership approach to relationships with suppliers, collaborating with them to help ensure they:
- Share our values and focus around business sustainability;
- Understand the key dimensions and drivers impacting business sustainability;
- Are aware of issues, risks and opportunities that are relevant to their supply chain operations; and
- Have management systems in place to address associated issues, risks and opportunities (for higher spend and higher risk suppliers).
To facilitate our partnership approach with suppliers, IAG Group Procurement's supplier management framework is aligned to our corporate performance drivers. This applies across IAG's range of suppliers, including corporate wardrobe, fleet, logistics, office supplies, print, print output devices, promotional merchandise, training and travel. This broadens the focus of how we engage with our suppliers on sustainability beyond environment, to all aspects of sustainability which influence our performance.
Suppliers are assessed on:
- Quality of performance;
- Commitment to IAG strategy and requirements;
- Value for money and price;
- Business sustainability; and
- Innovation and Technology.
Our focus also extends to our suppliers' suppliers. We work with suppliers to ensure their third party providers are also aware of the key dimensions which represent our view of a sustainable business.
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