Comprehensive Management Analysis of the IAG Insurance Company

This report provides a comprehensive analysis of the Insurance Australia Group (IAG), examining its management strategies, strategic priorities, and operational environment. It explores the company's purpose, values, and key strategic priorities, including customer focus, simplification, and agility. The report delves into criticisms faced by IAG, such as leadership changes and financial performance. It then conducts a detailed environmental analysis using PESTEL and Porter's Five Forces frameworks to assess political, economic, social, technological, and competitive factors. A SWOT analysis highlights IAG's strengths, weaknesses, opportunities, and threats, offering insights into its market position and future prospects. The report concludes by discussing IAG's organizational culture and corporate governance, providing a holistic view of the company's management approach and its implications.

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Introduction of management
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Introduction of management
Strategies been deployed by IAG company
Insurance Australia Group limited (IAG) is regarded is the parent company to a chain of
insurance companies which operates in different countries such Indonesia, Australia, Vietnam,
New Zealand and Thailand. The purpose of the company is to make the world a safer place for
human and others. This implies whether a person is a customer, a shareholder, a partner, an
employee or in any case a part of the community which the company serve in the above
countries, IAG subsist to make the world a safer place to stay and work on (Carr, 2014). The
company believes its purpose will enable them to become more sustainable business over the
long item and set free stronger and more reliable profit for its shareholders. The company’s spirit
is closer, brave and faster. The closer spirit is essential in creating real connection, brave spirit
will help the company see possibilities which will inspire the company and faster spirit will
always help in making things happen in the long last. The company strategy is to optimize the
core insurance business while also engaging in activities which will create future growth options
to the company (Carr, 2010).
Strategic priorities
The company has identified many strategies to stress on. However, on its operation the
company has identified only three key strategic priorities to deliver its strategy. The three key
priorities are customers, simplification and agility (Oddy, 2011). The three are discussed below
Customers

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The company is committed to creating a delivery platform which will be used to
transform the customer’s experiences in the long run. By doing this the company creates a strong
public relationship with customers in the current and future. The company has also tried to
connect the customers with the company by automating its process thus enabling Insurance
Australia Group to reach as many customers as possible in timely manner (Brogniez & Hall,
2013). By doing this the company have reduced the time the customers use to access the
company’s service at any time. Also the company has developed an innovation which has the
ability to think and deliver quickly. This has enabled the company to out-perform other
companies in the market thus acting as a competitive advantage in the long run. And lastly, to
save its customers well the company has been using data to power decision making, thus have
enabled the Insurance Australia Group to understand its customers well and better. The primary
purpose of many companies in the business environment is to make profit. In order to make
enough profit the company must serve its customers well by delivering quality services to them
(Hall, et al., 2010).
Simplification
In order to serve customers well the company must simplify its model. The current model
is simplified, modular and lower cost operating model. In order to deliver the services
accordingly, the company has reduced its organizational complexity. This is done through
consolidating the technology platform, executing the technology strategy, simplifying the
process and system, and harmonizing the products (Jaaware, 2009). Also the company have
leverage all the operational partners in order to optimize the operating model and doing so the
company is driving scale economies across all the value chain in the business environment.
Lastly, the company have stressed on improving the allocation and maximizing utilization of the

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preferred repairer network. By doing this the company is reducing the average claim size in the
market and the society at large (Huang, et al., 2011).
Agility
The company works day and night to make sure it reaches agile organization which has
distinguished innovation execution skills and the required speed. By reaching here the Insurance
Australia Group would have created disciplined approach to Insurance Australia Group
management as well as leadership in general (David & Gordon-Brown, 2016). This will include
building stronger role clarity as well as introducing agile way of working in the company. The
company is aspiring on building a pipeline based on skills which is key in delivering Insurance
Australia Group strategy and also helping the company’s employees to transition to the future of
work. Currently, the company has been recognized as a purpose leader organization which is
shaping its internal and external environment (David, 2018).
Criticisms to the company
Criticism can affect the company positively or negatively. In some cases, some criticism
can build or destruct the company. In the recent the company have be criticized by the
stakeholder in different ways. Some of the criticism includes
The company loss
James Strong who was the company’s chairman for seven years and he recently resigned
from criticism after the company recorded a loss of about $261 million. On her tenure Mr. Strong
oversaw the company numerous success and growth which resulted to recording of numerous
profit in many years despite the company making loss. The chairman decision to resign was

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welcomed with different opinion from the remaining board members. The decision was fueled by
the criticism from the shareholders who recorded a loss in the company. Mr. Strong who was
elected as a chairman in the year August, 2001 which was a year after IAG floated has now been
criticized with falling value of the company which exacerbated by an ill-timed $2 billion British
expansion over the past two years. The board accepted his resignation letter and appointed Mike
Wilkins a new chief executive. Mr. Strong decision has only drain some of his vocal people who
criticized him and the IAG board during the annual meeting in Sydney, although, it did not stop
nearly 20% of those investors who vote to do it against him during his re-election.
An environmental analysis
In its operations different business are affected by different factors. Thos factors may be
from the inside the company or they may be from outside the company. Those factors which are
from within the business are known as the internal factors while those from the outside the
organization is known as the external factors. Both internal and external factors affect the
organization is different ways. In this analysis we are going to look on how different factors
affect the IAG daily operations (Reeve, 2016).
General Environments (PESTEL) analysis

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Political factors
Political is a key component in company growth, for instance, it is very hard for a
company to grow and be successful if it is operating in a unstable country. Take for example a
company opening its branch in Somalia, the company would have few chances of growth
compared to another company operating in United State of America which is stable politically.
IAG is operating in political stable countries meaning it is doing okay (Eastwood, et al., 2011).
Economic factors
Economical factor always affect both the customers and the company at large. For
instance, inflation will force the customers not to buy the company’s product in the long run.
However, employment will result to increased disposal among customers who will feel the need
to buy the company’s product. Economically empowered people will buy the company’s product
The
Organization
(Insurance
Australia
Group)
Political factors
-Government
-Funding
-Grants
-Initiative
Economic Factors
--Inflation
-Interest rate
Labour and Energy
cost
Social Factors
-Population
Education
-Religion
-Lifestyle
-Culture
-Fashion
Technology Factors
-Emerging
technology
-Internet
Information and
communication
Environmental
factors
-Weather and
ethical issues
-Pollution
-Waste
_recycling
Legal factors
-Regulations
-Employement act

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at large. In the case of IAG, the company enjoys economically empowered customers who buy
the product in large volume at any case and continuously (Eastwood, et al., 2011).
Social factors
Some of the social factors which affect the product purchase include population,
education, religion, lifestyle, culture and fashion. These factors affect the company differently,
for example a learned person will see the need to buy the company’s product more often than a
person who is not educated. Also, some religious beliefs does not recognize the usage of some
products, some people like certain lifestyle more than the other. Culture and fashion is another
factor which affect IAG a lot. But in simple term the above factors favors the IAG products in all
the country it operates in.
Technology factors
First all the IAG encourages and support innovation in the market. This is because the
company understands that innovation is the only guarantee of tomorrow operation. The company
is able to operate in different countries due to its improved technology compared to other rival
companies in the market. For example, the mother company is able to monitor all the activities
on other companies through technology. Other companies from different countries are able to
submit their daily sales through computers.
M. Porter’s five force analysis
The company and the sector understand the use of Porter’s five forces. The porters
analysis include
Bargaining power of the buyers

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There is no strong bargaining power of the buyers this is because there are no strong
competitors in the market. Buyers are forced to buy at the rate which the company is selling at.
However, there is small emerging other insurance companies offering the same products at the
involved countries (Porter, 2016). But the IAG commands the market
Bargaining power of the suppliers
Like buyers also suppliers lacks strong bargaining power. This is because the company
does not depend on suppliers so much. Another factor is that the company acts as the leader in
the market and it lacks strong competitor.
Industry rivalry
There is no much rivalry in the market, this is caused by the fact that the company is
operating as a leader in the market. However, there is a small sign of rivalry in the future with
emerging small insurance company in the market.
Threat of new entrance
Some small companies is entering the market currently. Those new companies are posing
possible threats in the future. However, the government has put the required requirement which
acts as an entrant barrier. This will regulate the exploitation to the target market. In future the
company will face so many threats which are currently entering the market.
Threat of substitutes
Currently, there are no threats of substitutes as there are small products which can replace
insurance in the future. The company does not fear or get scared by the threats of substitutes in
all the operating countries (Porter, 2016).

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SWOT analysis
Strength
The companies enjoy different level of strengths. Some include
New products-the company have come up with different products to sell to the customers. Those
new products act as strength to the company.
Business growth and rise in income-there have been an increase in business growth in the some
years. The business growth resulted to increased income in the company which helped other
sectors.
Weakness
However, the company have some weakness in its operations. Some of the weakness includes
Bargaining
Power of
Buyers
Bargaining
Power of
Suppliers
Industry Rivaly
Threts of New
Entrants
Threats of
Substitutes

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Limited structure-the company has limited structure which can act as a source of income
through renting and leasing.
Low investment-the company operates in a low investment. This is caused by the fact that the
company has limited structure to obtain the required investment from banks and other lending
institutions.
Opportunity
Even if the company have some weakness as discussed above, it also has some opportunities in
the market
Some of opportunities include
Strong future growth-due to innovation and technology improvement the company have room
for future growth.
Stronger demand-currently, the company is concentrating in creating of strong demand which
will help the company in the coming future.
Threats
Threats are inevitable from any operating business. Some of the threats to the IAG Company are
Increasing coast-the cost of producing goods and product has been increasing day by day. An
increase in caused by increasing inflation in the current market.
Government regulation-the regulation by the government is creating threats in the long run.
Some of the regulations by the government includes work permit and high health standard which
every business must observe while operating in the business environment.

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The organisational culture or leadership style within the organisation
Currently, the company has corporate governance structure and also it have risk
management framework which is designed to provide the sustainable balance between the core
business and responsibility which results in the providing fair and stable returns is expected by
different shareholders in the long run (Magretta, 2012). Some of key corporate governance
policies and some principles which are strictly adhered with by the company are the constitution,
the board charter, the audit committee charter, the PARC charter and lastly the IAG risk
committee charter. To avoid any confusion the management have provided price sensitivity
information to all investors and market participants. This ensures they trust the company and
continues investing in the company in the long run.
Works Cited
Strength
New Products
Business Growth
Rise in per capita Income
Emerging Middle Income Group Weakness
Low investment
Dominance of Public sector
Promotion as a Barrier
Old tariff structure
Limited facilities
Opportunity
Creation of stronger demand
Strong future growth
Rise in Income and Awareness
Health insurance
Threats
Increasing cost
Government regulations
Increasing expenses and lower profit margins
SWOT Analysis

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