Glossary of terms

Absenteeism

Employee absenteeism is a measure to indicate the employee absence level in IAG. Absenteeism is determined by dividing the total annual unscheduled absence days by total number of available (rostered) working days for all employees in the year.

No figures are reported for our UK business.

Air travel

For Australia and New Zealand this represents the distance travelled by IAG employees including domestic, trans-Tasman and international flights booked through the online travel service provider. New Zealand results include brands: State, NZI, Swann Insurance, NAC, DriveRight,Lantern Insurance and Mike Henry.

In the UK, this represents domestic flights, short haul flights and long haul flights. Some of these flights are booked outside of the central travel service provider and these are manually included for completeness. The UK result also includes Barnett and Barnett.

In our Thai businesses, internal manual tracking of flights flown is undertaken.

Broker Satisfaction Index

In the UK, Broker satisfaction levels are determined by a third party through bi-annual telephone surveys with a random selection of Brokers. Brokers are asked to rate aspects of Equity Red Star’s service, including overall satisfaction, on a six point scale as follows: Excellent, Very Good, Good, Poor, Very Poor and Unacceptable.  A ‘weighted score’ is used. When calculating the overall score, each respondent is weighted according to how he or she has rated ERS. For example, an ‘excellent’ rating receives a 100% weighting, ‘very good’ receives an 80% weighting, ‘good’ receives a 60% weighting.

Business volume

This measures the volume of business at a point in time. The basis of the measure depends on the class of business. In the personal lines class, the relevant volume measure is 'risks in force'. In commercial classes, the volume measure is 'policies in force'. The difference in the definition is required to capture the distinct nature of IAG's business mix.

New Zealand brands included in this measurement: State, NZI, Lantern Insurance and Mike Henry Travel Insurance.

The UK data is the ERS Policy count based on the 2009 Underwriting Year of Account (calendar year).

In Thailand, policies in force data is provided for both businesses.

CO²e emissions

CO2e emissions are calculated for electricity use (scope 2 & 3), office paper and print paper consumption (scope 3), tool of trade fuel consumption (scope 1) and air travel (scope 3) and for gas (scope 1) consumption and rail travel (scope 3) in the UK.

For Australia, emission factors are obtained from the Australian Department of Climate Change National Greenhouse Accounts (NGA) Factors June 2009 workbook (electricity and fuel – only scope 1 emissions reported for fuel); the Greenhouse Gas Protocol 2006 Factors (air travel) and EPA Victoria, Worksheet 4 for calculating GHG emissions (paper). In the previous year paper factors were sourced from the Australian Paper Industry Council 2005.

For New Zealand, emission factors have been obtained from the New Zealand Ministry for the Environment Guidance for Voluntary Corporate Greenhouse Gas Reporting: Data and methods for the 2008 calendar year(fuel and electricity) and as per the Australian sources for air travel and paper. New Zealand brands included in this measurement: State, NZI, Swann Insurance, NAC, DriveRight, Lantern Insurance and Mike Henry.

In the UK, emissions factors have been sourced from the Department for Environment Food and Rural Affairs (DEFRA) for Electricity, Gas, Vehicle Fuel (petrol and diesel), rail travel and air travel (domestic, short haul and long haul). Paper is based on the US report Environmental Defence Fund, 1995: Paper Task Force Recommendations for purchasing and using environmental preferred paper Final Report.  The UK result also includes Barnett and Barnett.

Our Thai businesses have also used the factors sourced for Australia, with the exception of electricity which has been sourced from a paper published in January 2009 by the Thailand Department of Alternative Energy Development and Efficiency, Ministry of Energy January 2009.

Customer satisfaction index

In Australia, this measures the end to end customer experience when enquiring, taking out, or renewing a policy, or when making a claim for direct personal insurance. Customer satisfaction levels are determined by a third party through telephone interviews with a random sample of customers contacted.

The survey was conducted by a different supplier prior to 2006 and results attained before 2006 are thus not comparable with results attained from 2006 onwards.

In New Zealand, it is a measure of customer satisfaction through Sales & Service and Claims related contact with State and Lantern customers within the last month or customers whose claim has been closed during the previous month. The survey is conducted by a third party and satisfaction is measured by IAG as the percentage of customers rating 5, 6 or 7 in the survey on a 7 point scale are considered to be satisfied (7 = extremely satisfied and 1 = extremely dissatisfied).

Community grants   

Cash grants given to community groups through the community grants program. Figures reported are inclusive of GST.

Community Investment       

This estimates direct financial support of community groups and programs through sponsorship and donations, as well as indirect support to help promote and raise awareness of these community organisations (including commitments) through research and promotion. In Australia direct IAG management and administration costs related to community investment are also included plus salary costs and on costs for employee volunteering hours recorded in the Human Resources systems. Figures reported are exclusive of GST.

Definitions of forms of investment:

Donations. These include donations made directly by the business where funds are provided to an organisation and there is no obligation on the part of the recipient. Donations must be made with primary aim of improving the quality of life to sections of the community or to provide targeted welfare or other support;

Sponsorships. These are usually financial support in exchange for something from the receiving organisations, such as provision of advertising. The primary purpose of the sponsorship must be community rather than commercial benefit;

In kind. This includes the equivalent financial costs of materials/ services provided and time volunteered by employees to various community initiatives, events and fundraisers. This will not include volunteering undertaken in personal time unless it is specifically acknowledged by the business;

Administration: This includes management and administration costs of IAG staff directly involved in community investments; and

Research: This includes the financial support contributed to research activities. The primary purpose of the research must be community rather than commercial benefit.

Dollar values

Unless otherwise stated all dollar values listed in this report are based on Australian dollars.

Electricity

In Australia, this includes metered electricity consumption for those sites directly owned or controlled by IAG (approximately 82% of all sites). Where metered data is not available, electricity use has been estimated based on an equivalent floor space model using consumption figures for similar known sites.

In New Zealand, all electricity consumption is metered. Reporting timeframes have meant that June consumption figures have been estimated.

In the UK, Direct energy consumption data is recorded for those sites directly owned and controlled by IAG UK or where metered usage data is available from Landlord or Building Agent. This accounts for approximately 98% of sites by area occupied. Where this information is not available IAG UK either extrapolates the consumption data based on an equivalent floor space model using consumption figures for similar known sites or uses similar estimates supplied by the Landlord.

In Thailand, electricity invoices have been used to collate consumption information. However, where this information was not collected during the initial year of reporting (the first 6 months of the year for Safety Insurance and the first 3 months for NZI), averages have been applied based on the data that has been collected.

Measured in MWh of electricity consumed and per FTE.

Employee engagement score

In the prior year, IAG selected to work with a new third party engagement survey provider. Engagement is determined through eight questions that fall into the Think, Feel, Act and Stay categories. To be engaged employees must have a rational understanding of the organisation's strategic goals, values, and how they fit; an emotional attachment to the organisation; and motivation and willingness to invest discretionary effort to go above and beyond. Participation in the survey continues to be voluntary and is made available to all employees*. Engagement is measured by averaging an individual’s response to each engagement question.  The final engagement score is the total number of engaged employees as a percentage over the total number of respondents.

For New Zealand, this includes the State, NZI, NAC, Lantern Insurance, Swann Insurance, Mike Henry and DriveRight brands.

In the UK this includes Equity Red Star, Equity Direct Broking and Barnett and Barnett.

We are reporting the engagement score for all of our Asian businesses. The score includes all staff working for the Asia division, and excludes those non IAG staff in our joint venture partnerships and CAA.

Employee survey response rate identifies the proportion of those invited to participate in the survey that chose to respond.

* In Australia, New Zealand and Asia, staff on extended leave and short-term contracts are excluded from taking part in the survey whilst in our UK business they are included.  Staff on long-term contracts are invited to complete the survey.

Prior to 2009, the results were determined through six questions in the 'Your Voice' employee survey conducted by a third party. The survey assessed the extent to which employees consistently said positive things about working at IAG, wanted to stay with IAG and strove to achieve above and beyond what is expected of them. Participation in the survey was voluntary but was made available to all employees. Engagement was measured by averaging an individual’s response to each engagement question. The final engagement score was the total number of engaged employees as a percentage over the total number of respondents.

FTE (full time equivalent)

FTE is a measure of the size of IAG's workforce that takes account of part time employees. Full time employees are given a value of one. The value for part time employees is based on their regular hours as a proportion of full time hours. The FTE includes all permanent fulltime and part time employees, employees on a fixed term contract (paid by an IAG Group company’s payroll) and employees on leave without pay (less than 28 calendar days). It excludes guests (not paid by IAG), casuals and employees on extended leave without pay (more than 28 calendar days) on the day we report on the data.

Fuel consumption

In Australia this is the petrol, diesel and LPG consumed by IAG's tool of trade fleet. In New Zealand only petrol consumption is reported whilst in Thailand both petrol and diesel are consumed. No adjustments are made for any personal usage of the tool of trade vehicles.

No figures are reported for our UK business.

Full time employees versus part time employees (FTE)

Percentage of full time versus part time employees included in headcount. Full time employees work 35, 37.5 or 40 hours per week depending on their Enterprise Agreement or contract. Part time employees work less weekly hours than the full time hours under their enterprise agreement.

Gas

In the UK, this includes metered gas consumption for those sites directly owned or controlled, or those sites where metered data can be obtained from the Landlord or Agent. Where metered data is not available, gas consumption has been estimated based on an equivalent floor space model using consumption figures for similar known sites.

Gross written premium

The total amount received by the Group from customers for the payment of their insurance policies.

Headcount    

The number of people employed by IAG, regardless of hours worked. Headcount comprises permanent and fixed term employees. It includes employees on extended leave and excludes casuals and contractors (people not paid by IAG).

Note: Before 2007, the definition excluded employees on a fixed term contract.

Insurance margin

Contribution to profit from underwriting and investment income on claims reserves as a percentage of net earned premium.

Lost time injury frequency rate (LTIFR)

The number of lost time injuries for each one million hours worked. A lost time injury is an injury that has resulted in at least one shift/day's absence from work and for which a workers' compensation claim has been lodged and liability accepted. Journey claims and claims on an unpaid break are not included. Million hours worked includes all scheduled hours, plus overtime less leave and also includes the hours worked by casual employees.

No figures are reported for our UK or Thai businesses.

Lost time injury severity rate (LTISR)

This is a measure of how serious the incidents that have resulted in lost time are, based on the number of days lost. This is calculated as the total number of days lost following a lost time injury event per million hours worked. Working days lost as a result of the incident that occurred subsequent to the initial return to work are also counted. Part time workers lost time is calculated in the same way as full time workers, irrespective of the number of hours they work e.g. a worker who works three days a week, and is out of work for five days due to an injury, is recorded as having five days lost time.

Male to female salary ratio

The ratio is determined for our Australian and New Zealand businesses by dividing mean annual FTE salary for all males by that for all females within each employment category. FTE salary is used to standardise all salaries to what would be earned if each employee worked full time. This is obtained by multiplying the base salary by a factor (standard full time hours by region/actual weekly hours).

Employment categories disclosed represent the following employment levels:

• Heads Of – direct reports of IAG’s Group Executive members
• Senior manager – direct reports to IAG’s Head of group
• Manager / senior specialists – direct reports to IAG’s senior manager group
• General employees – all other employees.

This is not reported for our UK or Thai businesses.

Net claims expense

The amount paid out by the Group in claims during the year, as well as an estimate of how much is needed to pay on unsettled claims, plus claims handling costs such as legal and administrative expenses, less recoveries from reinsurers and other parties.

Net earned premium

This is gross earned premium minus reinsurance expense.

Office paper consumption

A3 and A4 office paper consumption as determined through an in house ordering system using several suppliers. This excludes glossy paper. The UK figures include Barnett and Barnett, whose figures are manually recorded.

In New Zealand, office paper consumption is measured through supplier invoices for paper ordered during the month, whilst in Thailand it is based on actual paper consumed.

Print paper consumption

Print paper consumption consisting of commercially printed material (booklets, envelopes, brochures and customer documentation such as renewals and certificates of insurance).

No figures are reported for our UK business.

Rail travel

This represents the distance travelled by rail by UK employees. Rail journeys are mostly booked through the central travel service provider. However, some staff book directly and reclaim through expenses and these journeys are not captured. Rail travel includes Barnett and Barnett.

Recycled commingled waste

Recycled commingled waste is a measure of paper, cardboard and commingled material collected for recycling across Australia. In previous years, it consisted of waste collected from IAG premises and archived material recycled only. From FY06–07, the measure also included paper sent for secure destruction. From FY07–08 the measure also included printer cartridges and consumables collected.

New Zealand figures included paper and cardboard recycled from the majority of sites, whereas commingled waste was only collected from Auckland, Wellington and, from FY2008, Christchurch sites (brands include State, NZI, Swann Insurance, NAC, Mike Henry, Lantern Insurance and DriveRight.

In Thailand, NZI recycles paper and cardboard only. Safety Insurance is largely paperless and does not recycle paper or cardboard.

No figures are reported for our UK business.

Return on equity

Net profit attributable to ordinary shareholders as a percentage of the average equity of those shareholders.

Staff turnover

Total turnover indicates the total number of staff terminations as a percentage of headcount. The turnover percentage is the aggregate of turnover for each month, where headcount is as at the end of the month. Staff terminations includes all permanent and fixed term full time and part time employees but excludes casual employees and guests, where the last day of employment was within the reporting period. Terminations do not include non starters and people terminated at the end of a fixed term, but do include fixed term appointments that are terminated earlier than the contract expiry date.

Volunteer hours

This measures the total number of hours that IAG employees have logged or community / charity leave, defence forces leave and emergency services leave undertaken during the year.

Women in executive management

For Australia, this measures the total percentage of women on the IAG executive team. For New Zealand and the UK, this measures the total percentage of women on the New Zealand and UK executive teams respectively. In Thailand this measures the percentage of women that are Business Unit CEO’s.

Women in senior management

Total percentage of females in senior management positions is determined by women in the position of senior manager, head of and executive roles, based on their career band in Australia. In New Zealand this represents the percentage of women who are employed through a senior management contract, as determined by the New Zealand Executive. In the UK, this measures the percentage of women that report to the UK Executive (excluding EAs and PAs). In Thailand this represents general managers (NZI), senior assistant vice president (Safety) and above as well as executive management.

Workplace accidents

The number of injuries accepted by the relevant workplace safety authority as work related. [New Zealand—Accident Compensation Corporation (ACC)].

Workplace giving program

The dollars contributed by staff through our payroll deduction scheme.