Shares in insurer IAG ended higher yesterday after the annual meeting was reassured the company is on track to meet guidance for the 2014-15 financial year.
CEO Mike Wilkins re-affirmed the company’s guidance to grow gross written premium by between 17% and 20% for 2014-15 and deliver an insurance margin of between 13.5% and 15.5%.
“In the opening months of the 2015 financial year, we have seen a continuation of the group’s strong operating performance and we believe we are well-placed to deliver on our full year guidance," he told shareholders at the company’s annual general meeting.
That saw the shares end up 2.6% at $6.45.
Mr Wilkins told the meeting that the Wesfarmers acquisition, completed in June this year, and IAG’s new Australian operating model were key to the next phase of the company’s development.
“We are pleased with the quality of the former Wesfarmers business and its integration is proceeding to plan. It is a highly complementary acquisition which will deliver significant value to IAG. It is clearly consistent with our strategy to leverage our market leadership to create superior value for customers, shareholders, partners, employees, and the community.
“Our move to a new operating model in Australia will allow us to better respond to customers’ changing expectations and behaviours, and ensure we remain fit for the future. The iconic brands our customers know and trust will continue, while our sharpened focus will enable us to better meet customers’ needs as they evolve,” Mr Wilkins said.
IAG YTD – IAG on track
Mr Wilkins added that it had been a significant year for the company as it delivered a strong performance which reflected the consistent and disciplined execution of its strategy.
"Our move to a new operating model in Australia will allow us to better respond to the changing expectations and behaviours of our customers, and will ensure we remain fit for the future.
"IAG now has three divisions in Australia, with our Enterprise Operations business providing the platforms, processes and services our Personal Insurance and Commercial Insurance businesses need to deliver an outstanding customer experience.
"The iconic brands our customers know and trust will continue, while our sharpened focus will enable us to better meet our customers’ needs, as they evolve.
"Because they are intertwined, we are treating the integration of the Wesfarmers business and the move to a new operating model in Australia as one project.
"Over a two-year period, we expect to realise combined overall pre-tax synergies and benefits of $230 million per annum, and we expect to hit that run rate as we complete the 2016 financial year,” Mr Wilkins told shareholders.
