Customers

Working to our customers’ advantage: our service responsibility

We regularly monitor our customers’ satisfaction with our products and services at the time of sale as well as at the point of claim. We aim to continually improve our customer satisfaction results, and they will be a key measure in our Executive team’s performance indicators going forward.

In New Zealand, Project Customise has been initiated to improve customer service. Since February 2006, 220 employees have attended the two-day Project Customise workshops, and 22 team leaders have attended leadership workshops. The workshops emphasised the importance of having natural, rather than scripted, conversations with our customers; and asking them questions rather than telling them what to do.

Insurers are often accused of hiding the devil in the detail. We believe in giving our customers clear and transparent information about our products so they can make the right decisions about their level of cover. We work to ensure that our policy documents and product disclosure statements are worded clearly and simply. Rather than bombard our customers with text-heavy amendments to policies, we provide additional information in clear, concise supplements that are easier to digest.

We also take privacy very seriously. As an insurer, we require a significant amount of information about our customers’ lives. In Australia, our commitment to our customers’ privacy is outlined in our Privacy Charter and in our policy documents. Across Australia and New Zealand, compliance with our privacy obligations is monitored at a business unit level as well as through the incident reports received through the Compliance Mailbox. The privacy policy (which underpins our charter) was reviewed and authorised by our Board of Directors in December 2005.

Sharing what we know to help customers reduce their own risk

Our commitment to our customers extends beyond the point of sale and the unfortunate time of claim. Helping our customers understand their exposure to risk and how to reduce these risks is one of the strongest benefits we can deliver.

To reduce risk we need to understand it. We do this by using the wealth of claims data we have as a result of being Australasia’s leading general insurer. In addition, we use the information gleaned from our Research Centre.

The Centre is the Australian representative of the international association of insurance research centres, the Research Council for Automobile Repair (RCAR), which comprises 25 members from 21 countries.

The Centre conducts research in six areas:

• new car risk assessment;
• car parts research;
• physical research on cars and home building products;
• input into car design and home products;
• public information programs about safety; and
• car and home security.

The purpose of the Research Centre is to measure and reduce risk in the community, and use our knowledge to drive innovation in the car and building industries. The Centre works with these industries to improve their products’ performance against a number of risk factors. In turn, this contributes to the long-term affordability of insurance.

One area of focus for the Research Centre is how cars perform in low speed collisions. Our Centre is one of six insurance research centres around the world that conducts a low-speed crash test program. The results are regularly published, and many car manufacturers participate by providing vehicles for tests. The objective of this work is to improve car design and ultimately reduce or contain insurance premiums.

We monitor the prices of over six million replacement parts for 41 brands of car in Australia. This helps us manage risks in two ways. Firstly, we use parts data in vehicle evaluations and crash tests to enable underwriting to be as competitive as possible. Secondly, information on the pricing and availability of parts is distributed to our motor assessors so that they can pay claims quickly.

Other physical research includes using a hail cannon to test the durability of home building materials and crash testing of cars. The hail cannon testing has led to work with roofing industry leaders. Together we are helping determine Sydney-specific roofing material to minimise damage from hailstorms. For more information see this case study.

We use the data from our Research Centre to help the community understand and reduce risk. Public advocacy programs include car security research, the Reversing Visibility Index, and road black spots. Findings from the Research Centre are used in our communication programs, media programs, and training for our customer service staff. Our road safety information, in particular, is also used to help inform Government policy.Finally, this information also feeds into online tools such as the Helphouse and the Greensafe Car Profiler, which help customers assess and reduce their own risks.

Understanding weather risk

Covering diverse areas such as dynamic financial analysis through to climate modelling, our actuaries give IAG sophisticated risk analysis. Our meteorological research is significant given our focus on reducing the risk of climate change to our customers and our business.

Our weather research is designed specifically to meet short and long-term goals across our home, motor and commercial product lines. Two main areas that we address are:

• what are the best estimates of today’s weather risk? and
• is the weather risk changing, and, if so, by how much and how quickly?

Addressing the first question traditionally involves reconstructing the observational record to as far back as possible. We can then estimate the nature of weather events for return periods of several hundreds of years. To do this accurately, many hundred years of historical data is required. More often than not the historical record is only accurate for several decades.

To overcome limitations in the historical records, we have taken advantage of recent advances in computing power and know-how by sponsoring work that blends the historical record with climate modelling simulations. These computer climate models simulate the climate for many years on a global scale. They have the added benefit of simulating today’s climate, where greenhouse gas concentrations are held constant at today’s levels; or simulating a possible future climate, where the greenhouse gas concentrations can be slowly adjusted to reflect future emissions projections.

Armed with this research, we aim to educate our customers and the broader public on the risks that climate change poses to our communities.

In 2006, we formed the Australian Business Roundtable on Climate Change with five other Australian businesses and a leading NGO and published “The Business Case for Early Action”. This report illustrates that, if action on climate change is delayed, it becomes more expensive for business and the wider Australian economy to reduce greenhouse gas emissions.

The report supplements previous research reports that IAG has released on climate change, including “The Impact of Climate Change on Insurance against Catastrophes” and “Climate Change: Solutions for Australia”, which IAG contributed to as part of the Australian Climate Group. We will continue to work with business, government and non-governmental organisations on appropriately addressing the increased risks that climate change poses.