Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
Tapping emerging technology and building external partnerships is helping IAG put customers at the centre of its business model and providing the vehicle for future products and services, according to the group’s CEO.
The ASX-listed insurance giant reported its half-year financials today, chalking up an insurance profit of $571 million for the half year, down from $610m in first-half 2016. This was based on an insurance margin of 13.5 per cent, again a dip from 14.9 per cent year-on-year.
Underlying margin was also softer at 12.6 per cent, down from 14.2 per cent in first-half 2016, while net profit after tax was $446m, a decrease of 4 per cent year-on-year.
IAG managing director and CEO, Peter Harmer, said the results were strong given the challenging environment.He cited a strong performance in IAG’s consumer business thanks to the stronger customer focus, noting growth in short-tail home and motor lines as well as comprehensive insurance premiums.
“This is a sound result for our core businesses in Australia and New Zealand, reinforced by the strength and integrity of our brands, our sharpened customer focus, and the quality and passion of our people,” Harmer said. “Underpinning our result is our strategy to make our customers feel safer and more confident through the products and services we deliver.”
Specific consumer division developments over the last half included a new customer management system; growth in the footprint and customer capability of social integrations including proactive chat and instant messaging; enhancements to mobile authentication, self-service quote and buy functionality for home insurance; and automated cash settlement and home claim lodgement. Core brand online sales now represent more than 20 per cent of all sales.
IAG said its challenger businesses, including SGIO, SGIC, Coles Insurance and BHIA, relaunched under the ‘Satellite’ moniker in first half and also benefitted from technology-led enhancements. These included a new Coles Insurance motor express quote facility online, plus a new SGIO/SGIC creative platform and brand facelift.
Over the past year, IAG has undergone an organisational shake-up, repositioning teams around two customer-facing divisions for consumer and business. The changes also saw the establishment of a Customer Lab, responsible for customer experience strategy and driving product innovation through data and insights, brand architecture and new business incubations and venturing.
One major technology-led step taken in recent months by IAG is a $75m venturing fund to work with emerging and established businesses on new products and services. Last week, IAG Customer Labs also revealed its new Singapore-based InsurTech innovation hub, named Firemark Labs, aimed at co-creating new customer solutions.
IAG has also begun using aerial drones for assessments as part of efforts to improve the customer claims process and established a consumer advisory board.
“We put customers at the centre of what we do by the enhanced use of technology, offering innovative new products through our core businesses and identifying new ways to meet ever-changing customer needs,” Harmer said.
“We are already seeing positive results, with our customers’ measure of our performance across our different brands above industry average. Our customer feedback is put into action through our ‘listen, learn and act’ model, which enables us to implement improvements, from the frontline through to senior management, to continuously drive better outcomes.”
Building customer intelligence
On the to-do list for Customer Labs during FY17 is finalising a new customer segmentation model, better leveraging data-driven insights and aligning these against brand and product propositions, and defining customer journeys. IAG also revealed plans to deploy a marketing automation system to optimise marketing spend.
In addition, Customer Labs is leading the charge to build a customer-led, data-driven culture across the wider business. To do this, IAG said it’s aligning customer measurement, introducing customer training and education programs for all staff, and by making data open and accessible throughout the organisation. Experimentation and in-market testing are core to this and will be support by cognitive computing techniques including machine learning, the company stated.
On the digital front, IAG is building out dedicated digital delivery teams for each division, and introducing API and mobile-first architecture and social coding to help better reuse technology within the group. Again, external partnerships and leveraging research institution are key to innovating, and IAG highlighted emerging technologies such as the Internet of Things, blockchain and drones as opportunities for growth in its financial report.