Our material issues
We identify material issues based on their potential impact to our business performance, and their importance to our stakeholders. Our material issues inform our strategic priorities, shared value approach and reporting.
Our material issues in 2018 are:
Customer and partner experience
Business success relies on the delivery of meaningful and valuable customer and partner experiences through the interactions we have every day, from face-to-face to technology solutions. For our business, this experience needs to be replicated across our network of operational partners, community partners, distributors and suppliers. Increasing customer and partner advocacy supports our purpose and organisational strategy. We are focussed on putting the customer at the centre of decision making and believe this requires understanding of the diverse needs and behaviours of the customer segments we serve. Getting this right is critical to our long-term success.
Trust in institutions
As evidenced by research from Edelman through the Trust Barometer, we have seen a trend towards erosion of trust across government, business, non government organisations and media. The drivers for this are complex but scandals, data breaches and increased access to information have all contributed. The erosion of trust is also a particularly relevant issue for financial institutions as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry conducts its inquiry into the industry. We believe trust is the foundation of our business and maintaining and building it is essential to our long term commercial viability.
Organisational culture and systems aligned to purpose
Having a capable, engaged and productive workforce is important for any large organisation to achieve its strategic objectives. We believe this becomes easier when a business is purpose led, delivering on its promises and providing people with meaningful work. At IAG, our purpose to “make your world a safer place” is more than words – it guides our strategy, our culture and our operational execution. This is particularly relevant for us and our people as we prepare for a changing world impacted by artificial intelligence, digital transformation, cyber risks and climate change. Our purpose, supported by our culture and systems, will help us to navigate this world and investing in our people through learning and development will enable the business to thrive.
Access and affordability
Many people do not have adequate insurance cover due to affordability issues, a lack of understanding around the level of protection they require, or a lack of suitable insurance products. We know that inadequate insurance reduces the ability of individuals, communities and our economy to recover from adverse events. As a major insurer, we have a responsibility to ensure insurance remains accessible and affordable. With increased risk, this is not easy. We recognise the need for us to ensure products are in place to meet customers and community’s needs. We also need to continue to focus on how insurance can be affordable for all, acknowledging our commitment to financial inclusion. We also need to assist customers and communities understand the level of protection they require. If we focus on our purpose of making your world a safer pace we will not only improve the resilience of our current customers and communities but can also open new market opportunities for IAG.
Managing our digital transformation
Digital transformation is one of the defining trends of the last decade. Digitisation impacts almost every facet of our business, creating both opportunities and challenges to the way we operate. In this disrupted world, we must continue to evolve our business model to stay relevant. Innovation and product development become critical to ensuring business sustainability and we must also acknowledge the challenges of a digital world, such as privacy and data security, which our stakeholders deeply care about.
Community connection and resilience
Communities are rapidly evolving and face new and increasingly complex challenges. Both individuals and communities need to be equipped with the knowledge and skills to survive, adapt and grow when facing stresses and shocks – whatever these may be. We know communities are more resilient when they are well prepared and connected. Communities which are resilient recover more quickly, adapt and thrive post shocks and stresses. They also rebuild and own assets more quickly, which provides insurance opportunities. Improving shared understanding of the risks people face is critical to improving safety on our roads, in our homes and in businesses.
Climate change and its impacts
We recognise climate change as one of the biggest threats to our society and way of life. This risk is heightened through urbanisation and further coastal development. The risk of extreme and destructive weather events will increase if we don’t succeed in reducing our global greenhouse gas emissions. This is particularly relevant to our business. We are there when extreme weather events hit and pay out claims to help our customers and communities recover. As a result, climate risk presents clear challenges for the sustainability of our business but it also creates significant opportunities. We are well positioned to use our industry expertise to help customers, partners and communities understand and manage the changing risk environment, build resilience and navigate the transition to a low carbon economy.
In contrast to the downward trend of the last 30 years, fatal traffic accidents have been increasing in Australia and New Zealand in recent years. Current thinking is this could be related to the introduction of mobile phones and other technology leading to distracted driving. This is an issue picked up by the United Nations with Sustainable Development Goal 3.6 focused on halving the number of global deaths and injuries from road traffic accidents by 2020. As one of the largest motor insurers in the region, this issue is particularly relevant to our business – during this financial year alone we paid over $3bn in motor insurance claims. This is especially pertinent for our major brand NRMA which holds road safety as a fundamental priority.
How we identify our material issues
We identified a range of issues and topics through research and engagement including:
- Interviews and feedback from investors
- Customer and broker feedback and trends
- Customer and community insights from Human-Centred Design
- Employee surveys
- Targeted stakeholder surveys as part of the materiality assessment
- Strategy and trend analysis and risk assessments
- Insights from the Ethics Committee and Consumer Advisory Board
- Insurance and banking peer review
- Media review
- Indices, standards and industry benchmarks such as the Global Reporting Initiative (GRI) and Dow Jones Sustainability Index (DJSI)
We surveyed a range of stakeholders representatives, and some of our employees, and asked them to prioritise a range of economic, environment and social aspects based on importance to them.
We then held a cross functional materiality workshop to test the insights from the stakeholder surveys, and assess and prioritise our material issues. Participants included representatives from our insurance and operating divisions, as well as functions that align to external stakeholder groups (for example Customer Experience, Investor Relations and Corporate Affairs).
Issues and topics were mapped and prioritised on two dimensions:
- Importance to stakeholders, determined by levels of interest and concern
- Business impact, in the context of our financial performance and strategy, the regulatory and competitive environment. We also considered the areas where we can make the greatest positive impact.
3) Validation and review
Results from the materiality workshop were reviewed in the context of completeness and stakeholder inclusiveness, and feedback on the draft materiality matrix was sought from stakeholders.
Material issues were reviewed and approved by our leadership, and the materiality assessment was also reviewed by EY as part of the sustainability assurance process.
Our approach to reporting
Our shared value and sustainability reporting is developed in line with the Global Reporting Initiative (GRI) guidelines. In 2018 our reporting uses GRI Standards’ Reporting Principles for Defining Report Content of Stakeholder Inclusiveness, Sustainability Context, Materiality, and Completeness. Our GRI Content Index is available on Our Performance page.
Since our inaugural report in 2004, we have obtained independent assurance of our sustainability and non-financial reporting. This year we engaged Ernst & Young (EY) to assure selected Customer, Community, Workforce and Environment indicators, as well as our adherence to the GRI G4 Principles for Defining Report Content of Stakeholder Inclusiveness, Sustainability Context, Materiality and Completeness.
The assurance was performed to a limited level in accordance with the ISAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information standard.
Results of the assurance can be found in the assurance statement provided by EY.