CASE STUDIES

After a battle with breast cancer, Fiona Macrae decided to take a holiday to recuperate. The only thing standing in her way was her inability to find reasonably priced travel insurance.

Many insurance companies asked distressing, personal questions, and upped their quotes by at least £150 (around $320) because she had suffered from breast cancer.

Fiona, who is now a Corporate Social Responsibility executive at Equity Insurance Group, decided to do something about the problem—to develop a travel insurance product.

Now, through the insurepink brand, Equity offers reasonably priced travel insurance to breast cancer sufferers, without distressing questions or loaded premiums. Motor and home insurance are also available.

Fiona's goal was not only to provide affordable insurance, but also to support the groups which support cancer sufferers.

As a result, insurepink supports the Pink Ribbon Foundation with a donation for every policy sold. Currently, more than £1,000 (around $2,100) a week is being raised through travel, motor and household insurance. And we're proud that insurepink was a finalist in the Personal Lines Initiative of the Year category for the United Kingdom Broker Awards and for the Insurance Services to Charity Award in the Charity Times Awards.

More recently, insureblue has been launched, offering a similar range of policies, with the addition of motorcycle insurance, for men diagnosed with testicular or prostate cancer. Donations from this are made to Everyman, the United Kingdom's leading male cancer campaign.

That's the philosophy behind NZI's suite of sustainable insurance products, the first of their kind to be offered to New Zealand consumers. NZI's personal insurance policies reward customers for being energy efficient, at home and on the road.

Features of the products include:
• a 10% discount for those who drive less than 5,000 kilometres a year—or 15% if those customers also drive a hybrid or fuel efficient vehicle;
• home building contents cover which enables customers to replace whitegoods with energy efficient equivalents; and
• up to an additional $20,000 cover on building claims to install sustainable features when rebuilding after a total loss.

The products differentiate NZI in a business environment where customers increasingly want to deal with sustainable companies.

Our businesses in New Zealand are also focusing on their own environmental performance—over the last three years, office paper consumption has fallen by 26%, fuel use has dropped 21% and air travel has reduced by 12%, and we are relocating to a 5 Star Green Star rated office in Auckland.

CGU's research shows four out of five Australian businesses are underinsured, on average by as much as 38%.

That's why CGU has developed Right Cover, an innovative, simple and cost effective service designed to ensure small businesses get the right level of insurance.

As part of Right Cover, a loss adjuster will review a small business owner's assets, trading profits and insurance requirements and produce a comprehensive report, including insurance recommendations.

When the business owner accepts and implements these recommendations, CGU will increase their insurance policy limit by a further 20% above the recommended levels, at no additional cost.

And while the price of the service, which has been developed to be affordable for small and medium enterprises, is only paid once, these benefits continue to apply to business insurance policies for an agreed period, as CGU will automatically index the sums insured by the consumer price index.

Having the right level of insurance can make all the difference when risk becomes reality.

India's general insurance sector has grown at a compound annual growth rate of 14% over the last five years, and is predicted to grow 15%–20% per annum over the next 10 years.

Not surprisingly, the market has attracted the attention of many insurers worldwide. IAG now has a significant advantage ahead of a number of major international insurers, having entered exclusive negotiations to form a general insurance joint venture with the country's largest bank, the State Bank of India.

With over 100 million customers, State Bank of India has one of the most trusted brands in India, a heritage dating back over 200 years and is included in Fortune's Global 500.

A joint venture will allow us to combine our core capabilities with the local knowledge and distribution network of one of the largest and most recognised financial services organisations in India.

IAG will bring to the partnership technical and underwriting expertise and capability in pricing and risk management, as well as a proven ability to work successfully with partners in the Asian region.

We expect the joint venture to commence operations in 2009.

This will be a significant step in IAG's Asian expansion strategy, designed to provide medium term growth to supplement our operations in our home markets of Australia and New Zealand.

In July 2007, the Home Contents collection service was initiated with NRMA Insurance customers in metropolitan areas of New South Wales. As at 30 June 2008, 4,292 damaged home contents items have been collected, of which 25% were sold at auction and the remaining 75% sent to a waste management facility to be recycled or land filled. Before this initiative was introduced, the majority of home contents damaged goods went to straight to landfill.

In keeping with the theme of the Carbonators, NRMA Insurance introduced a Carbo Truck to initiate the Home Contents Collection service with Queensland customers in January 2008. Since its establishment in Queensland, 185 collections have been undertaken by the Carbo Truck.

With the positive take up of the service by our customers, plans are afoot to expand it into other regions.

Enlisting help from the National Rugby League team it sponsors, the Brisbane Broncos—with select players starring as the Carbonators—NRMA Insurance went to market in August 2007 with an advertising campaign and product offer that would mobilise Queenslanders to go green with their car insurance.

By offsetting one tonne of carbon emissions for every new comprehensive car insurance customer at no extra cost to customers, the Carbonators campaign not only put climate change front of mind for many Queenslanders, but made it easy for customers to reduce their own carbon footprint.

NRMA Insurance Queensland State Manager Brett Robinson said the initiative made sense for an insurer and its customers.

"As an insurer in Queensland, NRMA Insurance is genuinely concerned about the effects of climate change and its impact on our communities, our business and our customers," he said.

"Research shows a link between increased global temperature and more severe weather events, and we know that carbon emissions are one of the largest contributors to global warming. Carbonators was a great initiative to differentiate our brand and help our customers better understand their impact on the environment, by giving them a simple means to reduce it."

As at June 2008, the Carbonators campaign had helped Queenslanders offset the same amount of carbon emissions as removing around 9,000 cars from the roads for one year.

In the days following the destructive December 2007 storm, NRMA Insurance received more than 25,000 claims, equalling the number usually received from this area in six months.

Teams from across the business quickly mobilised to begin the mammoth repair and rebuilding effort. A catastrophe assessment centre was opened where more than 2,000 motor claims were assessed weekly—a ten fold increase for the region.

The home repair process was complicated by a shortage of tradespeople over the summer holiday period and prolonged, unseasonably wet weather. In almost half of the 60 days after the storm, rain either disrupted or prevented roof repairs.

The industry attracted criticism from media, government and residents who believed insurers were taking too long to fix customers' homes.

NRMA Insurance stood out from competitors for its determination to battle through the wet weather and fulfil its insurance promises. In conjunction with suppliers, NRMA Insurance pioneered an 'umbrella' repair system which used a crane to hoist a marquee over damaged roofs while repairs were underway. A scaffold system to cover roofs was also used.

NRMA Insurance was the only insurer able to complete wet weather repairs and the extraordinary response of NRMA Insurance people during the event drew praise from New South Wales Emergency Services Minister Nathan Rees.

IAG is committed to generating optimal returns when making decisions about how to invest its funds.

We also align our investment philosophy with our broader sustainability framework, and for some of our investments, this means targeting opportunities to support environmental, social and governance (ESG) issues.

IAG has taken this approach for some years. We were a foundation investor in Generation Investment Management (GenerationIM), established in 2004 by six founding partners including former US Vice President Al Gore.

GenerationIM's International Equity Fund was one of the first to integrate sustainability research within a rigorous fundamental equity analysis framework. We are pleased that our investment in this fund has performed well against benchmarks.

During the past year, through our newly established Sustainable Investment Fund, we invested in a new offering from GenerationIM—the Climate Solutions Fund—which invests in companies that are part of the solution to climate change.

We also invested in the Arkx Carbon Fund, which aims to deliver long term returns for investors while contributing to a low carbon economy, and in a microgeneration wind turbine developer.

We became a signatory to the UN Principles for Responsible Investment, a set of voluntary and aspirational principles to help incorporate ESG issues into investment decision making. As part of our responsibility as a signatory, we will encourage our external fund managers to sign.

A 30 second commute and a $30 saving—it's all in a day's work for Suzi Nicolaou. Suzi, an Insurance Solutions Consultant with NRMA Insurance, is one of a growing band of NRMA Insurance call centre employees who work from home.

Suzi said the change has made a difference to her family and her bank balance.

"It's made a difference to my family life, especially as I have young children. I can work in school hours and I don't have to worry about after school care for the kids," she said.

"I'm also saving up to $30 a day on parking, food and petrol. I'm only working part time so that $30 makes a big difference."

The program is an important part of NRMA Insurance's strategy to attract and retain staff in an increasingly competitive employment market.

The employees taking part in the program have access to the same systems as call centre based staff, and interact with NRMA Insurance customers in the same way.

What is different is the level of flexibility they now have.

This year in Australia and New Zealand we launched Every Step Counts, a campaign designed to boost our current activities and encourage staff to take small actions to help make a difference. Actions such as switching off lights, shutting down computers at night and thinking before printing.

Our New Zealand business has taken the approach of introducing a new 'step' each quarter. The first step Every Watt Counts was about using electricity wisely. Every Leaf Counts targeted reductions in our office paper use and Every Trip Counts is about reducing travel.

"We've designed the program to incorporate an annual team challenge to encourage people to find creative ways to reduce their team's emissions," explains Kerryn Butler, New Zealand's Sustainability Manager.

"By introducing a new step each quarter we've helped people to be carbon conscious and to understand the simple actions that they can take to make an individual difference to our business emissions," Kerryn adds.

The success of the program in New Zealand has made an obvious impact on their environmental performance, with an overall reduction in their CO²e emissions of 9% this year.

One of the many recommendations contained in the report suggested that amendments be made to the Corporations Act 2001 to allow companies to make annual reports available on the internet and require hard copies to be sent only to investors who request them.

As IAG has the second largest shareholder register in Australia—with more than 900,000 members—the monetary savings to IAG in not being required to provide a report to shareholders are substantial, coupled with significant savings in paper usage.

IAG's Government and International Relations specialists worked closely with the Australian Treasury, Government and Opposition to ensure that our views on the reform were appropriately understood, including the monetary benefits accruing to our shareholders and the sustainability advantages. This was undertaken both through consultation on discussion papers and the draft exposure bill and through direct contact with Treasury and members of parliament.

In mid 2007, the Simpler Regulatory System Bill 2007, incorporating the opt in provision for annual reports, was passed and came into effect from 1 July 2007.

This year IAG has made use of this regulatory change in the provision of the annual report to shareholders for the 2008 financial year, resulting in a saving of 86 tonnes of paper. This amounts to: 2,064 trees; 172 barrels of oil; 2.4 million litres of water; and 352,600 kWh of electricity.*

Prior to the 2007 Australian Federal Election, both the then Government and Opposition committed to the introduction of such a scheme.

IAG believes that the carbon dioxide currently within the atmosphere has the potential to increase the frequency, severity and location of severe climatic events.

These events could have significant negative ramifications for IAG's claims expense.

We are therefore advocating to the Australian Federal Government an adaptation strategy based upon: improving community resilience, review and assessment of current building codes, a national framework for land use assessment and working with government in identifying solutions for insurance product gaps.

A key role for IAG is informing the debate on these issues, to ensure that action by government—federal, state or local—is favourable to the interests of both our customers and shareholders in the short to long term.

Initial preparatory audits were conducted in late 2007 at various PSR sites in Victoria, Queensland and New South Wales. These audits covered waste, water, energy and CO²e emissions and out of these investigations grew a broader IAG Environmental Standard. Preparation of the Environmental Standard involved engaging a variety of stakeholders including PSRs, internal stakeholders and funding partner, the New South Wales Department of Environment and Conservation (DECC).

In order to understand current industry practice and to determine a reasonable level at which the Environmental Standard should be set, 'road testing' was undertaken in mid 2008 with the generous assistance of four PSRs in New South Wales and five in Victoria, in both metro and rural settings. The assessments were conducted with Adaptation Environmental Services, one of IAG's business partners.

The Environmental Standard has been developed to assist PSRs to meet their regulatory obligations through the provision of knowledge and support tools and aims to set a benchmark for environmental performance across the industry. It will also recognise and celebrate best practice, providing incentives for ongoing environmental improvement across the areas of managing waste, water, energy, noise; and air quality management.

The Environmental Standard and the on line resources of information, tips and special offers to assist the PSR network are set to be launched at the end of 2008.

This year State Insurance have taken the initiative to help their preferred auto repairers reduce their impact and are establishing a process whereby irreparable plastic bumpers can be collected for recycling.

A group of 120 approved repairers in Auckland have embraced the recycling initiative that will include Whangarei and Hamilton and will extend to Wellington and Christchurch.

The plastic bumpers are taken to a site in Auckland where they are compacted and chipped and sent for recycling into commercial pellets and therefore used for another purpose.

Product development manager at State Insurance Mike Parbery says there are important issues to consider and address in our approach to recycling. "The cost of pickup and delivery relative to the return on recycling plastic is a tough balancing act in the face of soaring transport prices. We also need to measure the environmental impact of pick up and delivery and be aware of any ethical issues around how the recycled plastic will be used to be certain our processes are truly sustainable."

The guidelines set minimum standards for sustainability performance and performance criteria for suppliers wishing to do business with us. These guidelines are being progressively implemented in consultation with our suppliers and a flexible approach is required to accommodate the diverse and expansive range of suppliers we deal with.

To supplement these guidelines we also conduct supplier performance reporting for our strategic operational suppliers. Next year we aim to report on the percentage of these suppliers that have sustainability goals built into their supplier performance reports.

Sustainability considerations regularly applied include the supplier's commitment to IAG sustainability aims and the supplier's own initiatives and targets. The benefit of this approach is that it encourages both suppliers and IAG to consider the progress of sustainability projects on a regular basis.

The supplier performance reports ensure that IAG's sustainability program and targets are cascaded down to our supplier base. The reports have been well received by suppliers.

IAG's JumpStart Trade Careers Program is an initiative that supports individuals in pursuing a career in the Australian autobody repair and building industries.

The program helps Australian students and IAG's preferred suppliers in the autobody repair and building industries to increase the number of new technicians entering these industries. This helps ensure that IAG customers receive quality service in the event of having a vehicle or home repaired.

In addition to providing support for the apprentices and employers, IAG has worked in conjunction with TAFE (Technical And Further Education) colleges and industry groups in Australia to develop new entry paths for people wishing to enter a trade career.

In December 2007 a pilot program was launched which involved six adult workers (all over 30 years of age) commencing an accelerated apprenticeship which they are aiming to complete within two years, compared to the traditional four year apprenticeship undertaken by school leavers.

Because of the close working relationship between TAFE and IAG there are a number of JumpStart projects underway involving employers that have attracted Australian Government funding to develop training models that will fast track the time taken for high performing apprentices to obtain their qualifications.

State Driver Reviver invites drivers to pull over, take a break and avoid fatigue. In marquees at key crash spots during holiday periods, State Driver Reviver offers free coffee and food, as well as a safe spot to take a break.

As a partner in State Driver Reviver, the New Zealand Accident Compensation Corporation (ACC) keeps State Insurance supplied with information to educate drivers on the dangers of fatigue and how to avoid them.

According to the ACC, around 14% of all fatal car crashes in New Zealand involve driver fatigue, which in 2007 accounted for almost 60 road deaths.*

Implemented since 2005, the initiative continues to be a success with 6,586 drivers and their passengers taking a break at nine State Driver Reviver events held during Labour Weekend 2007 and Easter 2008.

In July 2007, IAG employees and their families took to parks around Australia armed with trowels and gloves to take part in Planet Ark National Tree Day.

The eager volunteers jumped at the opportunity to get their hands dirty planting trees—helping to improve local communities while reducing the environmental risk of climate change at the same time.

More than 600 IAG employees, family and friends volunteered at 14 Planet Ark National Tree Day sites around Australia, planting over 10,000 trees, the equivalent of taking 580 cars off the road for a year

"As a large organisation which provides a community product like insurance, I think it's vital that employees have the opportunity to personally support socially responsible initiatives. Being able to involve my family also helped make it a great day out. It's reassuring to know that the company I work for supports the same initiatives and values I believe in as an individual," says Rhett Clayton, CTP Claims Western Care Unit, New South Wales

In February 2008 a group of people from IAG NZ's Risk and Underwriting team spent a day on Motutapu, an island in the Hauraki Gulf Marine Park in Auckland, volunteering to help the Motutapu Restoration Trust restore the cultural and natural landscape of Motutapu. Tree planting, nursery work and weed control were the order of the day for volunteers.
IAG NZ Product Innovation Manager, Beth Coleman spent the day planting seedlings into containers and found some time to explore Motutapu as well. "The whole day was brilliantly organised and taking part in it was so worthwhile. Doing work that makes a difference to the environment fits so well with our position on sustainability."

Since the volunteering program began in 2004, IAG employees across Australia and New Zealand have contributed 38,026 hours of voluntary time to a wide variety of community groups.

NRMA CareFlight is a non profit rapid response medical trauma service that provides specialist intensive care treatment to people injured in road accidents, falls and other emergency situations.

The Head Injury Retrieval Trial (HIRT) involves sending a specialist NRMA CareFlight doctor and paramedic directly to the accident scene where people have suffered a severe head injury.

The aim of the trial is to determine whether providing 'pre hospital' trauma care improves recovery outcomes for people with head injuries.

The trial is being conducted throughout Greater Sydney in partnership with the NSW Ambulance Service and the Motor Accidents Authority.

Over the last three years NRMA Insurance has contributed $11.2 million to fund NRMA CareFlight's world first clinical trial into head injuries.

In Australia, community organisations can apply for grants of up to $5,000 (including GST) for road safety, crime prevention, environmental, or emergency readiness and response initiatives.

This year, 141 community groups across Australia received a communityhelp grant.

Since the program began in 2003, we have invested $3.6 million into over 1,000 community projects across Australia. Our employees are also actively involved, with many volunteering to help groups implement their projects.

The SBN is a not for profit business organisation established to provide practical advice and support to assist business sustainability. They support their business members with networking opportunities, program delivery, training and sustainability assessments.

One of the tools being developed with the assistance of NZI and MFE is Get Sust Online. This tool is designed for those businesses just beginning to look at their sustainability and will deliver a simple web based self assessment accompanied by some advice on the next steps for progressing sustainability within their business.

With the launch of NZI's suite of sustainable insurance products in 2007 attracting some interest from New Zealand brokers in understanding how they too can be sustainable, NZI will invite them to be part of the pilot of Get Sust Online.

NZI is also supporting the SBN to develop and launch a sustainable products and services directory in 2008. The directory is designed to be a credible and objective source of advice on the sustainable products and services available in New Zealand. In line with this, NZI sponsors the New Zealand Sustainable Business Network Awards.

The Australian Climate Group was co founded by IAG and WWF—Australia in 2004 to make a case for urgent action in response to climate change.

On 18 March 2008, the ACG released a report which provides recommendations for Australian Government policy to address climate change. These included recommendations to adopt measures to:
• stabilise national emissions by 2010 through both domestic measures and the purchase of international emissions reduction permits;
• establish an emissions target for 2020 consistent with that of other developed countries (such as the European Union);
• ensure that the emission trading scheme is designed such that the Australian Government is not burdened by failure of participants to comply with it; and
• ensure that the national emission trading scheme is flexible enough to respond to new information quickly.

A copy of the ACG report can be found in the Other Reports section of this website.

Established by the Association of British Insurers (ABI), ClimateWise is a group of 32 major United Kingdom insurance companies, pledging to lead the way in analysing and reducing risks; supporting climate awareness among customers; engaging in public policy debate and reducing the environmental impact of their businesses.

At the launch, HRH Prince of Wales said, "This is just the beginning of the process of real change. Time is a luxury we do not have and I urge companies both at home and internationally to sign the ClimateWise principles and take the necessary action."

The signatories will report each year on action they've taken. Neil Utley, CEO Equity Insurance Group said, "The ABI figures on climate change are compelling. Sea levels are already rising at a faster rate than scientists predicted and the latest estimates suggest levels on the United Kingdom's east coast could rise 40 centimetres by 2050. Recent changes to the climate have doubled the chances of very hot summers in Europe. In 2003 about 22,000 people died prematurely as a result of the hot summer."

"The ClimateWise cause is urgent for us all – both as leaders of insurance companies and as citizens. It is an exciting and inspiring example of our industry working at its best."

The six ClimateWise principles are:

• lead in risk analysis;
• inform public policy making;
• support climate awareness amongst our customers;
• incorporate climate change into our investment strategies;
• reduce the environmental impact of our business; and
• report and be accountable.

At our head office in Sydney this year we've been working with our building owner to improve the sustainability of the site.

Three IAG sites in Melbourne moved into a 5 Star Green Star rated building in 2008. Buildings with these ratings meet international best practice standards in sustainability, and include features such as energy efficient lighting, zoned air conditioning and water saving taps and sanitary fixtures.

IAG NZ is also on the move to state of the art, sustainable premises. In late 2009, IAG NZ will be moving many of its Auckland based staff to a purpose built development in Auckland's CBD. The development will accommodate around 600 staff and has a 5 Star Green Star rating.

The 5 Star Green Star Adelaide office into which IAG moved during 2006, has enabled staff to achieve a 50% reduction in energy use on the previous locations.

Representing excellence in environmentally sustainable design across categories such as indoor environment quality, energy, water, materials and innovation, the Green Star buildings reflect IAG's commitment to reducing our environmental impact while managing costs.

In 2007, Fran Roehlecke from the Technology Services Team and an active member of the Sustainability Action Team (SAT) saw a real opportunity to combine her skills and develop something that would help others to act sustainably.

Fran set up the car pooling noticeboard within the IAG NZ intranet, which is popularly used by staff to learn more about the business, view updates, and even engage in a daily quiz.

The carpooling noticeboard enables ride sharing within all of IAG NZ's regional offices but also caters for those who are flying between regions and wish to share a taxi from the airport to an IAG NZ location.

Fran's initiative earned her an award for 'Helping Others in Sustainability' in IAG NZ's 2008 Reward and Recognition program.

"I am passionate about sustainability and so I really enjoyed developing the car pooling noticeboard. It is great to be able to do something to help others engage in sustainability too," explains Fran.

IAG buildings and branches turned off their lighting and external signs on the night of Saturday 29 March 2008 to symbolise that it is possible to take action on climate change.

While it sounds simple enough, enabling IAG sites across Sydney, Melbourne, Adelaide and Perth to turn their lights off is a significant achievement and there were many technical challenges our Facilities Management Team faced in readying our buildings.

While Earth Hour is a symbolic, one off initiative, our extended facilities team used the event as a catalyst to make longer lasting changes to reduce our energy needs every day. The team reviewed each of our buildings, walking floor by floor, to determine where power is unnecessarily being drawn out of hours (for instance, areas that have lighting and air conditioning on after hours).

Many IAG employees also got involved and took the time to shut down their PC and take appliances off standby before leaving for the weekend. Many also shared their plans for their night in the lead up to Earth Hour, ranging from a family backyard camp out through to a 'green' BBQ.

Gabriel Felkai from our Direct Insurance Telephone Business Centre spent Earth Hour teaching his children the moral and monetary value of conserving rather than wasting resources.

"Me and my father before me have practiced earth hour protocols over the last 60 years. I have said to my kids that apart from being good for the environment, it leaves more money to spend on having fun which is a very tangible experience" says Gabriel.