Insurance Australia Group: Strategic Management Analysis Report

This report provides a comprehensive strategic analysis of Insurance Australia Group (IAG). It begins with an executive summary and table of contents, followed by an introduction to IAG's strategy, mission, vision, and core competencies. The report examines successful past strategies and current approaches, as well as criticisms faced by the company and their effects on stakeholders. Proposed solutions to these criticisms are presented. The analysis incorporates PESTEL and Porter's Five Forces frameworks to assess the external business environment, particularly in the Australian context. The report concludes with a summary of findings and references.

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Insurance Australia Group Strategic Management
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Executive Summary
An organization is expected to develop a proper strategy that will assist in acquiring the
set long-term goals of production. The strategies are supposed to consider the changes that are in
the business environment for sustainable performance in the market. The strategy implemented
by a company influences the organizational culture that is used to maximize the production level
of the company. An organization is expected to focus on developing a beneficial organizational
culture that will provide an extended performance in the targeted market.

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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Insurance Australia Group strategy.................................................................................................4
Mission.........................................................................................................................................4
Vision...........................................................................................................................................4
Core Competencies......................................................................................................................5
Successful past strategies.............................................................................................................5
Current strategies.........................................................................................................................5
Insurance Australia Group critics....................................................................................................6
Effects on stakeholders................................................................................................................6
Solution to the critics...................................................................................................................6
Analysis tool....................................................................................................................................7
PESTEL Analysis: Australia context...........................................................................................7
Political factors.........................................................................................................................7
Economic factors......................................................................................................................7
Social factors............................................................................................................................7
Technological factors...............................................................................................................7
Environmental factors..............................................................................................................8

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Legal factors.............................................................................................................................8
Porter’s five force analysis...........................................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The management is expected to analyse the external business environment in acquiring a
proper plan that will improve the performance of the company. Insurance Australia Group is a
company that has acquired an increased market share through development of appropriate
strategies. Proper evaluation of the financial industry has assisted the company to develop a plan
to deal with the competition in the market. The corporate strategies implemented by the
management are aimed at acquiring a sustainable competitive edge in the insurance industry
(Grant 2016). The focus on organizational culture and leadership style assist the business to
achieve long-term profitability in the market. Insurance Australia Group implements a vision and
mission that will guide the employees towards an accomplishment of the desired production
levels. It is necessary to develop mission and vision statements that will enhance the profitability
of the company towards the achievement of the desired production level in the market.
Insurance Australia Group strategy
The strategy is used by the management to operate and control the production process
towards the accomplishment of the desired production level. It is essential for the administration
to have a proper understanding of the consumer needs in acquiring a sustainable performance
level in the market. Insurance Australia Group strategy is aimed at providing unique insurance
services to the consumers in the nation for the achievement of the intended sales volume and
profit margin (Insurance Australia Group, 2018). The top management develops the strategy with
the aim of dealing with the changes in the business environment for extreme performance in the
industry. The company has been able to be in the insurance industry for a long time due to the
implementation of proper past and present strategies.

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Mission
The mission statement is used to provide an overview of the production goals of the
company for a steady flow of business operations. Staffs are required to act according to the
mission statement in achieving the short term and long term production objectives (Klettner,
Clarke & Boersma 2014). The Insurance Australia Group has a mission of providing quality
insurance services to the public for a smooth flow of life. The company is aimed at acquiring the
confidence of the community through safety services. The company operates in Australia, New
Zealand, and Asia with the employees requiring focusing on an increased performance of the
company by offering safety services to the community (Insurance Australia Group, 2018). The
sustainability reports are used in ensuring that the employees follow the set mission statement for
the accomplishment of the desired production level. The mission statement of Insurance
Australia Group is focused on confidence and safety to the community through insurance
services.
Vision
The vision provides the intended long-term goal of the company through the continuous
development of operation in the market. The Insurance Australia Group vision is to become a
leading insurance provider in Australia and Asia. The ability to satisfy the needs of consumers is
used by a company to acquire the desired long-term production level. Insurance Australia Group
develops plans that will provide an increase in shareholder value which is a responsibility of the
company. The focus on shareholders assists the company to accomplish the desired capital for
business expansion (Schenkel et al. 2015). A vision statement that is focused on shareholders is
used by the public companies to attract a large number of investors in the market. The vision

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statement is used as an inspiration to the employees towards the attainment of the targeted
production targets.
Core competencies
The core competencies are used by a company to make it appear unique in the targeted
market. The uniqueness of production is essential in achieving an increased market share through
high customer satisfaction. Insurance Australia Group code of conduct includes fairness, respect,
communication, relationship and confidentiality (Insurance Australia Group, 2018). The
emphasis on the community helps the business to develop products that are widely accepted in
the market. The fair treatment of the employees and consumers assists the company to acquire a
beneficial reputation that will maximize production. The focus on reputation in the targeted
market helps the business to retain and acquire consumers (Han & Hyun 2015). Insurance
Australia Group production processes are aimed at following the set regulations in the nation for
proper flow in the market. The compliance to law assists in dealing with the external business
environment for a steady flow of business production processes.
Successful past strategies
The strategies of the company are focused on customer service improvement for the
accomplishment of the desired production level. The updating of the customer management
systems has provided the company with a proper platform to increase the customer base in the
insurance industry (Insurance Australia Group, 2018). It is necessary for a company to focus on
quality production towards a sustainable performance in the market. A company needs the
evaluation of consumer inquiries and complaints in developing products that will maximize
profits. The financial products are supposed to evaluate the consumer needs in the market for a
steady flow of the business performance.

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Current strategies
The company current strategies are focused on technological innovations to assists in
dealing with the changes in the financial market. It is essential for a company to develop a
sustainable performance in the market through differentiated strategy. The differentiated strategy
is archived by using advanced technology in the production process for unique services to the
consumers. Insurance Australia Group is a public company requiring focusing on sharing of
financial information to the community (Insurance Australia Group, 2018). The financial
reporting is used by the company to enhance the perception of the public based on the
performance of the company. Insurance Australia Group has been able to acquire a continuous
increase in revenue and net profit which is necessary for raising the confidence of the
community.
Insurance Australia Group critics
The company has been criticized for refusal of claim payment and poor investment
decisions. It is crucial for a company to focus on the stakeholders' needs reduce conflict of
interests in the company. The criticism of the company is mainly due to the poor management
plan that is implemented by the company to focus on the changing external business
environment. The claim payment issues negatively impact the performance of the company due
to the poor rating by the consumers. It is necessary for a company to focus on developing
policies that are widely understood by the consumers to reduce issues while paying claims. The
company was taken to court for refusing to pay claims after the house was infested with mold
and the clients had NRMA home policy (Collier, 2013). The home policy is required to protect
clients from loss incurred in the home due to natural emergencies. It was necessary for Insurance
Australia Group to consider paying the claim as the mold were due to the heavy storms

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experienced in the nation at the time. The second issue is unprofitable businesses in the
Southwest part of Asia which is making the company reduce the financial performance of the
parent company in Australia (Chatterjee & Daga, 2018). It is necessary for a company to focus
on profitable markets with the aim of acquiring a high-profit margin and value addition to the
shareholders.
Effects on stakeholders
The issues have reduced the reputation in the market with potential consumers choosing
the competing insurance company. The primary aim of insurance is to reduce the financial
burden of an individual after acquiring the policy. An insurance company that has a high level of
claim payment assists in obtaining a sustainable performance in the financial market. Insurance
Australia Group is required to focus on fast claim payment towards the accomplishment of the
short term and long term goals of production. The consumers are important stakeholders of the
company which require being provided with quality services and products for sustainable
performance of the company in the market (Agnihotri et al. 2016). Stakeholder management is
necessary for decision-making process for a proper flow of business operations in the industry.
According to Collier (2013), the 277,000 spores of mold in cubic meter compared to the
reasonable level of 1000 spores per cubic meter. The repair and rebuilding process Insurance
Australia Group was unable to deal with the issue in the market which led to the dissatisfaction
of the client. The investment with a low return in Southeast Asia made the stakeholders to lose
confidence in the amendment of the company. The company experienced an underwriting loss of
A$ 6 million in the first half of 2018 compared to A$9 million in the second half of 2017
(Chatterjee & Daga, 2018). An organization is expected to focus on developing plans for dealing
with the issues in the market through prior strategic management. The investment decisions

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implemented should be analysed to reduce the share value of the company which negatively
impacts the shareholders.
Solution to the critics
The company developed plans to deal with the issues for a proper flow of the company in
the insurance industry. Insurance Australia Group is highly dependent on the consumer and
shareholders for the accomplishment of the desired production level. Insurance Australia Group
developed a plan of rebuilding and repairs of the home of the client whose home was infested by
mold (Collier, 2013). The repair was closely inspected towards the achievement of satisfaction to
the consumers. The ability to accompany to deliver services to a company determines the
customer loyalty in the market. The customer loyalty in the insurance industry is achieved
through payment of claims considering the policy purchased from the company. The
management focused on developing an organizational culture that is consumer oriented to reduce
the complaints in the market (Alvesson & Sveningsson 2015). The organizational culture is
needed in attaining the desired production level of the company through the enhanced
cooperation of employees. In dealing with investments issues, the management is required to
analyse the market to identify the profitable countries effectively. In dealing with the losses in
the Southern Asia nations the company intended to sell the business at $ 500 million (Chatterjee
& Daga, 2018). The company will be able to focus on profitable markets in Australia, New
Zealand and part of Asia.

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Analysis tool
PESTEL Analysis: Australia context
The PESTEL analysis is used to evaluate the external business environment by focusing
on political, economic, social, technological, environmental and legal factors. Insurance
Australia Group is required to assess the external business factors in Australia for sustainable
performance in the market.
Political factors
The political status in Australia is suitable for businesses due to the stability and
deregulation of operations. Australia is ranked number thirteen by the Transparency International
through its efforts to handle corruption (Transparency.org, 2018). The reduction of corruption
levels in the country assists business to accomplish the desired production level in the market.
Economic factors
Australia has been experienced a continuous growth of the economy which is necessary
for doing businesses. It is vital for the management to focus on a nation that has a stable
economy to acquire the desired production level in the market. According to Janda (2017), there
was a 3% increase in the economy in 2017 compared to the previous year due to the enhanced
industrialization in the nation.
Social factors
Australia is a multicultural nation where there are people from different ethical
background and English is the widely used language in the country. According to Nelson (2015),
an organization is expected to have an insight of the customs and beliefs of the community for
increased performance in the market.

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Technological factors
The technology use assists a business in developing plans that will enhance effectiveness
in production. The technology infrastructures implemented in Australia are focused on acquiring
a stable flow of the community through economic growth (Atse.org.au, 2018). Technology
engineering department of Australia is used to discover the advanced technology that will
enhance social and economic performance.
Environmental factors
The government has developed conservation measures that should be used by the
individuals and businesses in the nation. The Environmental Sustainability Policy is used by the
government to regulate the waste and carbon dioxide emission in the country
(Humanservices.gov.au, 2018). It is necessary to comply with the laws for a proper environment
in the nation by handling the issue of climate change.
Legal factors
The regulations in the nations are focused on increasing local and foreign investment in
the country. The Anti-Discrimination laws are used to provide equal opportunities to the
community seeking employment (Australian Law Reform Commission, 2018). Businesses are
required to focus on the set regulations towards a sustainable flow of the national activities.
Porter’s five force analysis
The Porter’s five force analysis is a technique used by an organization to acquire the
desired production level in the market. It is necessary for the management to understand the five
forces which include competitive rivalry, buyer power, supplier power, threat to entry and
substitute threat (Dobbs 2014). The competitive rivalry requires Insurance Australia Group to