Pride and positivity IAG’s new boss is proud of the way his team and the industry responded to last year’s challenges. And he’s upbeat about the future By John Deex
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ick Hawkins took over from Peter Harmer as Managing Director and Chief Executive of IAG in November, just in time to deal with the fallout from the hard market, declining profits, the pandemic and its associated challenges. The long-serving IAG executive – he was chief financial officer for 12 years before being named deputy chief executive in April last year – was tagged by Chairman Elizabeth Bryan as having “a deep understanding of both global and domestic general insurance along with operational and financial experience”. His first few months in the job have been particularly testing for 52-year-old Mr Hawkins, with IAG recording a $460 million net loss for the six months to December 31, a turnaround from the $283 million profit for the previous corresponding period. However, insurance profit increased more than 33% to $667 million, thanks mainly to the present hard market. The main cause of IAG’s financial hiccup is the need to include a contingency worth an estimated $865 million following the industry’s failure to convince the NSW Court of Appeal to disallow pandemic-related business interruption claims on policies that referenced the outdated Quarantine Act. About half of IAG’s 76,000 business interruption policies refer to the old legislation, which was replaced by the Biosecurity Act 2015. John Deex: Looking first at the wider economy you’re operating in, what are the biggest challenges for the insurance industry? Nick Hawkins: The past year has presented some
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of the most challenging events some of us had to face in our lifetimes. The heartbreak and scale of the Black Summer bushfires is something we hope we won’t have to experience again. As we were helping bushfire victims with their recovery, our customers were then hit by floods and severe hailstorms. And within weeks, the nation was dealing with the shock of the COVID-19 pandemic and the consequences we’ve all experienced since then. The constant for me through these events was the focus and dedication of our people in doing everything they could to support our customers. From our specialist teams basing themselves in the worst impacted bushfire zones, to the support measures we put in place for our customers struggling during COVID-19, we’ve done everything we can to be there for our customers during these crises. We know people continue to value insurance and the security it provides, and we’ll continue to support our customers, in their recovery from this pandemic. How long do you see it taking for the national economy to recover? I’m optimistic about the Australian economy. The federal and state governments’ stimulus packages and action by the Reserve Bank have played an important role in supporting the economy, especially Australian small-to-medium businesses. I think we will continue to see key economic indicators move in a positive direction. Tied to that is the hard insurance market, which is becoming a bigger issue for SME businesses in
