IAG NZ is the first insurance company in New Zealand to ‘step up’ to the sustainability challenge. Given it accounts for 40% of the insurance market in New Zealand, it is likely that other industry players will take a close look at what IAG NZ has done and the company’s reasons for doing so.

Ecos Corporation was engaged by IAG NZ’s executive in 2003 to assess the value of sustainability in terms of revitalising the company’s State Insurance brand. Early into our work, IAG purchased NZI, making IAG NZ the largest insurer in New Zealand. Following the acquisition, the business priorities focused on minimising the risks inherent in the post-acquisition integration process, repositioning the brands as new dynamic players in the market and establishing a platform from which to grow the new business. Sustainability has played a signifi cant role in each of these priorities.

The size and scale of IAG NZ’s combined operations not only impose huge responsibilities in regards to customers and shareholders, they inevitably pose both challenges and opportunities to the management team. One of those challenges related to integrating two formerly competing businesses into one functioning cohesive workforce. The new business comprised of over 1,700 staff in a network of 8 call centres, 31 sales centres, 10 branches and 7 district offices. The second challenge related to market share – with over 40% of the market it is inevitable that the new company would come under increasing scrutiny. The insurance industry in NZ is not held in high esteem and IAG NZ recognised the need to lift its performance in terms of its reputation or risk increased regulation in the event it was not meeting public expectations.

Sustainability offered IAG NZ a framework that assisted it to address both these challenges. Put simply, sustainable growth seeks to create value for the business by improving the quality of life for everyone, while protecting the environment. It’s a model designed to create value for business and society at the same time.

A company’s social purpose can be used to build loyalty, morale and cohesion internally amongst staff as well as repositioning the company externally as a valuable and valued corporate player in the NZ community. If IAG NZ became recognised as an institution that makes a major contribution to making NZ a safer, more secure society, then it would become the more attractive insurance provider to potential customers, business partners and other stakeholders including the Government and regulators.

IAG’s management team acknowledges that the initial inspiration to think outside the confines of traditional financial risk management came from Ecos, however the work would have not moved forward without a visionary Chief Executive and executive team, many of whom were new to the insurance sector.