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Our material issues

Material issues affect IAG’s ability to deliver on our purpose to make your world a safer place. IAG prioritises the most important issues through engagement with key internal and external stakeholders through an annual materiality process.

 

Customers, employees, partners, shareholders and the communities in which we operate have been engaged in this year’s process.  We then prioritised these issues based on their impact on the economy, society and the environment and their potential to affect our business performance.

Understanding these material issues helps us to concentrate our efforts on the areas where we can achieve the best positive impact while delivering on our purpose.

The material issues we identified in 2020 and 2021 are:

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, a lack of suitable insurance products or due to different needs and vulnerabilities acting as barriers to being able to access. 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 needs. We need to continue to focus on how insurance can be affordable and accessible for all, acknowledging our commitment to financial inclusion. We also need to assist customers and communities to understand the level of protection they require. If we focus on our purpose of making your world a safer place, we will not only improve the resilience of our current customers and communities but also open new market opportunities for IAG.

Post disaster relief and emergency response

More than nine million Australians have been affected by a natural disaster or extreme weather event over the last 30 years. Through research, the Australian Business Roundtable for Disaster Resilience & Safer Communities has found that the total costs of natural disasters in Australia are forecast to more than double in real terms to $39 billion per year by 2050. IAG’s success is determined by how well we support our customers to get back on their feet when disaster strikes. We have a responsibility to support the people and businesses we protect when they need us the most and have the skills and experience to offer our customers rapid support to help them recover. We also promote disaster resilience and mitigation to help our customers and their communities be as prepared as possible for the risks they may face.

Climate change and its impacts

We recognise climate change as one of the biggest threats to our society and way of life today. 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 occur and pay out appropriate 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.

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, and adapt and thrive after 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.

Identifying our material issues

In FY21 we identified an opportunity to further embed our materiality process and material issues into the business. From FY22 we will run the process in the first quarter of the year (rather than the fourth), better aligning to our Enterprise Risk Profile, trends analysis and strategy setting, and business planning cycles. This year we continued to focus on the material issues identified in FY20.

While we have not run a full stakeholder engagement process for this year’s materiality assessment, we did survey our customers to understand which issues they think are most important, and to validate our continued use of the FY20 material issues. In FY22 we are aiming to increase engagement in the process to ensure we continue to consider a broad range of stakeholder views.

Our approach to identifying material issues in FY20 is detailed below:

We identified a range of issues and topics through research and engagement including:

  • Feedback from investors
  • Customer feedback and trends
  • Employee surveys
  • Targeted stakeholder surveys as part of the materiality assessment
  • Indices, standards and industry benchmarks such as Global Reporting Initiative (GRI) and Dow Jones Sustainability Index (DJSI)

Prioritisation

We surveyed a range of stakeholder 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).

Validation and review

Results from the materiality workshop were reviewed in the context of completeness and stakeholder inclusiveness.

Material issues were reviewed and approved by our leadership, and the materiality assessment was also reviewed by EY as part of the FY20 sustainability assurance process. 

Our approach to reporting

Our safer communities reporting (including shared value and sustainability reporting) is developed in line with the Global Reporting Initiative (GRI) guidelines. In 2021 our reporting uses GRI Standards’ Reporting Principles for Defining Report Content of Stakeholder Inclusiveness, Sustainability Context, Materiality, and Completeness. 

External assurance

Since our inaugural report in 2004, we have obtained independent assurance of our sustainability and non-financial reporting. This year we engaged KPMG 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.

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