FRESH THINKING

We asked Sean Kidney, co-founder of Pluto Press, Social Change Media and Social Change Media online, to interview two members of our Executive, Sam Mostyn and Nick Hawkins. Here are his reflections following those conversations.

My youngest daughter turned 10 recently. She had a cocktail party to celebrate. My role was to be the tuxedo-clad butler. As I watched the kids come through the front door I couldn’t help wondering about what sort of future we were building for them, about what their world would be.

A week later I found myself walking through the corridors of a company that seems to worry about the same thing: IAG.

Insurance is a central component of the workings of our society. We have built our prosperity around an idea that we can create our own future, that by consciously investing in housing, enterprise and infrastructure now we will have a better life in the future.

Insurance, a modern art blending history and mathematics, allows us to mitigate the risk of that bold assertion: that we can invent our future. By spreading the risks involved in inventing the future, insurance makes it more possible. By actively peering into the future, insurance companies can help us shape it.

This is an important development in how companies see their role.

Sam Mostyn, former IAG Group Executive Culture and Reputation and now strategic advisor to the Group, cites a quote from the World Business Council of Sustainable Development; “Business cannot succeed in a society that fails”. That means that IAG sees its long term success as being intricately tied to the long term success of the societies it operates in. This is driving changes in how the company works, from improving internal practices of waste and carbon management, to working with health services to reduce accident trauma impact (and costs). Mostyn explains these efforts as being about delivering long term shareholder returns.

IAG in New Zealand, for example, has been working closely and successfully with government on improving flood management planning.

This reduces overall risk. Nick Hawkins, CEO, New Zealand, is a great fan of the company’s role in increasing awareness of climate change, but he also argues there’s room to do much more, that IAG has to sharpen the focus of its advocacy objectives. He recognises that this will be a huge challenge, given the company is essentially aiming to build the prosperity of the societies it operates in.

Interestingly, Mostyn reports that an immediate benefit of this corporate social responsibility approach has been in staff recruitment. With a very tight employment market, the effort undertaken has already paid financial dividends in this area.

Staff surveys show overwhelming support for the company’s direction.

IAG is also tracking customer recruitment and retention and believes the company’s growing reputation for being a good corporate citizen will improve this key performance indicator.

IAG is focusing on a broad role of managing and reducing risk in society.

From the original idea of using claims history to manage its future premium risk, the company has moved to assessing the future of the economic environment in which it manages that risk. IAG has identified climate change as one of the most important risks facing its sustained success. As a result, IAG has become a vocal advocate of the need to mitigate its impact.

Bertrand Russell argued that enlightened self-interest would be the driving force in creating a better world. That’s what we seem to be seeing with IAG.

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