Insurance Australia Group is to get a new chairman in 2010, which might be just about when the insurer starts coming out of its self-induced earnings coma of the past three years.
The group’s AGM was told yesterday that a fellow director, Brian Schwarz would become deputy chairman and takeover the chairmanship in 2010.
“At last year’s Annual General Meeting, I indicated the Board had agreed on the need for stability in the Chair position during the implementation of our revised strategy and changes in management and governance,” Mr Strong said.
“I also informed shareholders when I was re-elected that, under the Board’s tenure policy, this would be my last term as a director and that the Board had engaged professional advisors and would be conducting an orderly exercise to decide on Chair succession and continuing Board renewal.
“As a result of this process, the Board has unanimously agreed to appoint Mr Brian Schwartz as Deputy Chairman. Brian will succeed me in the role of Chair when I retire from the Board at the end of the financial year. The Board also expects to appoint another director in 2010.
“Over the past year, significant progress has been made by Chief Executive Mike Wilkins and his management team.
" The Board intends to maintain the strategy which is producing improved results for the Group," Mr Strong told the meeting.
IAG shares ended up 7 cents at $3.94 on that news and the reaffirmation of the company’s 2010 earnings guidance.
"I am confident that the improvements evident in our underlying performance will continue in the year ahead and deliver stronger returns for shareholders," Mr Strong said in a report to shareholders.
CEO, Michael Wilkins told shareholders that if operating conditions experienced in the first quarter continued, IAG would expect to deliver an insurance margin towards the upper end of its 9%-11% guidance for the 2010 financial year.
"In the first quarter, we’ve seen the underlying performance of the business continue to improve and we’ve had the added benefit of narrowing credit spreads," Mr Wilkins said.
"This remains subject to our normal caveats around natural perils and investment markets," he told shareholders.
"We also expect to achieve our previous guidance of underlying GWP growth in the range of 35%."
However, reported GWP is likely to be affected by the strength of the Australian dollar, Mr Wilkins said (which will also hurt its bigger competitor, QBE).
IAG it last month in an update that it was beginning to experience the benefits of a turnaround strategy implemented since the company posted a $261 million loss in 2007-08.
In 2008-09 it reported a $181 million profit.
