IAG set for shake-up as new CEO Nick Hawkins takes reins

Insurance Australia Group’s new chief executive Nick Hawkins has announced a major restructure on his first day in the role.

CEO Nick Hawkins of IAG. Picture: NCA Newswire / Gaye Gerard

Insurance Australia Group’s new chief executive, Nick Hawkins, has pushed ahead with a restructure on his first day in the role, with Australia CEO Mark Milliner set to exit.

IAG’s Australia division will be split into Direct Insurance Australia and Intermediated Insurance Australia, with immediate effect.

Amanda Whiting, IAG’s executive general manager for consumer distribution, will become acting group executive for Direct Insurance Australia, while Julie Batch will act as group executive for Intermediated Insurance Australia, in addition to her current role leading IAG’s strategy and innovation division, the insurer said.

“As a result, IAG CEO Australia Mark Milliner will leave the company at the end of November,” IAG said.

Mr Milliner had been considered a contender to take over from former CEO Peter Harmer but lost out to Mr Hawkins, who was named the insurer’s new boss in September.

IAG also announced that Michelle McPherson had been appointed chief financial officer, having been acting in the position since April.

“Mark has enjoyed a long career in insurance and is highly respected in our industry. We have been peers on the executive team for the past four years and I’ve seen first-hand the significant contribution he’s made to our company. I want to personally thank Mark for his help and support and wish him every success for the future,” Mr Hawkins said.

“The changes announced will set us up well for success as we continue to focus on delivering a simpler, stronger and more resilient IAG that meets the evolving needs of our customers and communities we serve,” he said.

Bell Potter analyst TS Lim said splitting the Australian business would improve accountability within the division and that Ms McPherson’s appointment to the CFO role was a good move.

“She was at NIB before and did a pretty good job, so it’s a good appointment,” he said.

Ms McPherson joined IAG in April this year following a 17-year stint at health insurer NIB.

He was also not surprised that Mr Milliner was leaving the insurer. “In the tradition of (losing out on the top job), he now has to leave,” Mr Lim said.

IAG, which houses brands such as NRMA, CGU and Swann Insurance, and the insurance industry are navigating the Royal Commission into National Natural Disaster Arrangements, which released recommendations last week, as well as the COVID-19 impact.

At its annual meeting last month, IAG sharpened its argument around the industry not being set up to insure against pandemics. The company committed to giving an update on the business interruption matter after the outcome of a test case.

IAG chair Elizabeth Bryan used her AGM speech to say the insurance sector was not “designed, structured, or capitalised” to cover systemic risks such as a pandemic, arguing its policies did not cover business interruption from COVID-19.

But the topic has caused confusion in the business community and a landmark test case was filed in the NSW Supreme Court by the Australian Financial Complaints Authority and the Insurance Council of Australia in July seeking to clarify disagreements around policy wording.

Mr Hawkins told The Australian in September he was confident the test case would go the insurance industry’s way, despite a similar case in the UK finding in favour of policyholders.

Separately, Suncorp on Monday said it expected more insurance claims from the severe storm that affected southeast Queensland and northern NSW on October 31. As at Monday afternoon, Suncorp — which houses brands including AAMI and GIO — had received 3,600 claims related to the storm.