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NEWS RELEASE 10 July 2012

IAG ON TRACK TO REALISE SIGNIFICANT GROWTH IN ASIA

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Insurance Australia Group Limited (IAG) today provided an update on its Asian operations and the substantial growth opportunities from its regional footprint. Speaking at a market briefing in Sydney, IAG Managing Director and Chief Executive Officer Mr Mike Wilkins, said there was a significant growth opportunity in Asia with middle class consumption (ex Japan) expected to increase by nearly 200%, to around US$12 trillion, by 2020. He said IAG is well positioned to benefit from the accompanying trend of increased asset ownership in markets where insurance penetration is currently low, resulting in long term profitable growth close to home. “The Asian opportunity is here and now. Over the past couple of years we’ve quietly gone about our Asian strategy and are now getting real traction. We are entering an exciting phase of our Asian ambitions as we shift from a market entry focus to one of driving operational performance from our enlarged regional presence,” Mr Wilkins said. After completion of the Kurnia acquisition in Malaysia, which is expected to close in the second half of calendar 2012, IAG will have approximately $720 million invested in five Asian countries. Around $500 million will be invested in established businesses in Thailand (Safety Insurance) and Malaysia (AmG and Kurnia) that are already delivering strong double digit returns, rising to an ROE of more than 15% by FY17. IAG has invested a further $220 million in the emerging markets of India (SBI General), China (Bohai Insurance) and Vietnam (AAA Assurance). While these businesses are currently in the development phase, they are expected to generate an ROE of more than 15% by FY17. The ROE expectations are before allocation of regional development costs which are expected to peak at approximately $25 million (pre-tax) in FY13. IAG’s CEO of Asia, Mr Justin Breheny, said IAG’s local business model was fundamental to its success in Asia. He identified three key elements to this model: effective market entry, local partnering and capability transfer. “We have a proven business model in Asia,” Mr Breheny said. “Our extremely disciplined approach to market entry has resulted in an attractive portfolio of businesses, with differing stages of market development and associated growth and return profiles, but all with a clear ability to create value for the Group. “We have attracted extremely high quality partners in Asia, such as AmBank in Malaysia and State Bank of India, who possess the right brand and distribution profile, and share the same long term objectives as us. This partnering approach allows us to build our credibility with the benefit of operating with trusted local brands. “IAG adds value through its specialised insurance expertise. Our well-established capability transfer programme has already delivered considerable operational improvement in our established markets of Thailand and Malaysia, and we fully expect this to be repeated as it is applied across our developing markets of India, China and Vietnam,” he said.

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INVESTOR BRIEFING IAG will be hosting an investor briefing at 10:00am (Sydney time) today. The briefing will be webcast live on www.iag.com.au and a teleconference facility is available for analysts and media. To call within Australia: 1 800 558 698 To call from elsewhere outside Australia: +61 2 9007 3187 Please quote conference ID 726373 A copy of the presentation can also be downloaded from www.iag.com.au About Insurance Australia Group Insurance Australia Group (IAG) is the parent company of an international general insurance group, with operations in Australia, New Zealand, the United Kingdom and Asia. Its current businesses underwrite over $8billion of premium per annum, selling insurance under many leading brands including NRMA Insurance, CGU, SGIO, SGIC and Swann (Australia); NZI, AMI and State (NZ); Equity Red Star (UK); and Safety and NZI (Thailand). For further information please visit www.iag.com.au.

Corporate Affairs Steve Pratt T 02 9292 8286 M 0411 010 057 E [email protected]

Investor RelationsSimon Phibbs T 02 9292 8796 M 0411 011 899 E [email protected]

Insurance Australia Group Limited ABN 60 090 739 923 388 George Street Sydney NSW 2000 Australia T 02 9292 9222 www.iag.com.au

10 July 2012 ABN 60 090 739 923

ASIAN STRATEGY INVESTOR BRIEFING

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This presentation contains general information in summary form which is current as at 10 July 2012. It presents financial information on both a statutory basis (which has been prepared in accordance with the Australian accounting standards, which comply with International Financial Reporting Standards (IFRS)) and non-IFRS basis. This presentation is not a recommendation or advice in relation to Insurance Australia Group Limited (“IAG”) or any product or service offered by IAG’s subsidiaries. It is not intended to be relied upon as advice to investors or potential investors, and does not contain all information relevant or necessary for an investment decision. It should be read in conjunction with IAG’s other periodic and continuous disclosure announcements filed with the Australian Securities Exchange which are also available at www.iag.com.au. No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation. To the maximum extent permitted by law, IAG, its subsidiaries and their respective directors, officers, employees and agents disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in or omitted from this presentation. No recommendation is made as to how investors should make an investment decision. Investors must rely on their own examination of IAG, including the merits and risks involved. Investors should consult with their own professional advisors in connection with any acquisition of securities. The information in this presentation is for general information only. To the extent that certain statements contained in this presentation may constitute “forward-looking statements” or statements about “future matters”, the information reflects IAG’s intent, belief or expectations at the date of this presentation. IAG gives no undertaking to update this information over time (subject to legal or regulatory requirements). Any forward-looking statements, including projections, guidance on future revenues, earnings and estimates, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause IAG’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Any forward-looking statements, opinions and estimates in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Neither IAG, nor any other person, gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur. In addition, please note that past performance is no guarantee or indication of future performance. This presentation does not constitute an offer to issue or sell securities or other financial products in any jurisdiction. The distribution of this presentation outside Australia may be restricted by law. Any recipient of this presentation outside Australia must seek advice on and observe any such restrictions. This presentation may not be reproduced or published, in whole or in part, for any purpose without the prior written permission of IAG. Local currencies have been used where possible. Prevailing current exchange rates have been used to convert local currency amounts into Australian dollars, where appropriate. All US dollar figures have been extracted from public sources and have been replicated without further adjustment. All references starting with “1H” refer to the six months ended 31 December, being the first half of IAG’s financial year. For example, “1H12” refers to the six months ended 31 December 2011. All references starting with “2H” refer to the six months ended 30 June, being the second half of IAG’s financial year. For example, “2H12” refers to the six months ended 30 June 2012. All references starting with “FY” refer to the financial year ended 30 June. For example, “FY12” refers to the year ended 30 June 2012. All references to individual business profitability are before allocation of regional support and development costs.

IMPORTANT INFORMATION

ASIAN STRATEGY – 10 JULY 2012

3

AGENDA 3

Our strategy in Asia Justin Breheny

Update on our Asian businesses Duncan Brain, Justin Breheny

Our partners’ views Tan Sri Dato’ Azman Hashim, Chairman, AMMB Holdings (AmBank) Mr Pratip Chaudhuri, Chairman, State Bank of India

Q&A session

1

2

3

4


4

IAG’S STRATEGIC PRIORITIES A CLEAR FOCUS ON AUSTRALIA, NEW ZEALAND AND ASIA


5

Source: OECD NON-LIFE GWP² US$424 billion 122%

THE SIZE OF THE ASIAN OPPORTUNITY PROFITABLE GROWTH, CLOSE TO HOME

MIDDLE CLASS CONSUMPTION¹

ASSET OWNERSHIP¹

BY THE YEAR 2020

US$12 trillion 185%

US$97.5 trillion 203%

¹ Asia, ex-Japan ² Emerging Asia (China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam) Sources: McKinsey; OECD; Swiss Re


6

IAG’S EXPANDING ASIAN PRESENCE PORTFOLIO OF ESTABLISHED AND DEVELOPING BUSINESSES

THAILAND MALAYSIA INDIA CHINA VIETNAM

98.6% 49%

26% (option to 49%²)



¹

ESTABLISHED

DEVELOPING

¹ Completion expected second half calendar 2012 ² Subject to foreign investment regulations


7

ASIA INVESTOR BRIEFING KEY TAKEOUTS 7

IAG has a portfolio of quality businesses to capitalise on the substantial growth in Asia

Competitive advantage comes from a robust and disciplined approach to market entry, partner selection and capability transfer

Significant value creation expected over the medium to longer term

1

2

3


IAG’S ASIAN STRATEGY

Justin Breheny Chief Executive Officer, Asia

9

STRATEGIC FOCUS SHIFTING FROM M&A TO OPERATIONAL PERFORMANCE 9

Established presence in Malaysia

Moved to control in Thailand

Developed partnership model

Focus on M&A and growing market share in existing markets

Developing businesses in India, China and Vietnam

Strong performance from enlarged Malaysian JV

Investigating opportunities in Indonesia

Continued improvement in returns, from:

– Active management of businesses

– Ongoing capability transfer

– Driving operational efficiency and performance

Appointed directors to Safety in Thailand

Teams on ground in China and Singapore

Personnel part of current Asia senior leadership, ensuring continuity and experience

Increasing operational focus

Decreasing M&A focus

PRE 2005 HORIZON 1 2005-2010

HORIZON 2 2010-2015

HORIZON 3 BEYOND 2015


DISCIPLINED EXECUTION BUSINESS MODEL DELIVERS COMPETITIVE ADVANTAGE

10

Effective market entry

Disciplined and structured approach, in high growth and regionally significant markets

Local partnering Aligned to IAG’s aspirations with strong brand, customer base and distribution footprint

Capability transfer

Value added through capability transfer across the insurance chain

1 2 3


11

EFFECTIVE MARKET ENTRY SIX PRIORITY MARKETS - HIGH GROWTH, REGIONALLY SIGNIFICANT

Sources: BMI; World Bank; Swiss Re; IAG analysis Note: Growth rates are CAGR 2011-2015

EMERGING GLOBAL GIANTS

CHINA US$ 7,298bn 9% 1.3bn GDP GDP ↑

15% GWP ↑ POP.

INDIA US$1,676bn 8% 1.2bn GDP GDP ↑

16% GWP ↑ POP.

VIETNAM US$123bn 8% 89m GDP GDP ↑

20% GWP ↑ POP.

INDONESIA US$846bn 6% 241m GDP GDP ↑

15% GWP ↑ POP.

DEVELOPING

THAILAND US$346bn 5% 64m GDP GDP ↑

7% GWP ↑

ESTABLISHED

MALAYSIA US$248bn 4% 28m GDP GDP ↑

7% GWP ↑

POP.

POP.

1


EFFECTIVE MARKET ENTRY DISCIPLINED AND STRUCTURED PROCESS APPLIED

Scoping Relationship Building Deal Making Operations

Integrate & consolidate

further acquisitions

Build local capability

Identify priorities and

develop plan to add value

Buy into a local company as

opportunities emerge

Build relationships with owners

and regulators

Develop market entry/

acquisition plan

Understand the market

Identify priority markets

2006 in-market investigation – 2012

India

China

Thailand

Malaysia

Indonesia

2009-2012

2012

Watching brief

Kurnia 2012

Vietnam In progress

2006-2012

20% investment 1999, consolidated 2006

30% investment 2006, dial-up to 49% 2008

1999-2012

2006 in-market representation – 26% investment 2009

2004 in-market representation – 20% investment 2012

2006 in-market investigation – 30% investment 2012

c.80 opportunities examined 26 due diligences conducted 5 deals concluded

12

1

Investigating


LOCAL PARTNERING STRICT CRITERIA, MUTUAL ASPIRATIONS AND APPRECIATION

Major, high growth player

Significant available influence

High product and channel compatibility

Strong business quality

Available and highly motivated

Strong sense of urgency

Strong stakeholder support

Low barriers to capability transfer

THEY BRING: Brand Customer base Distribution footprint Stakeholder support (eg regulators, government) Local knowledge WE BRING: Leading insurance expertise Access to economies of scale WE SHARE: Common aspirations and goals for the business Mutual respect Drive and urgency to deliver results Appreciation of what the other brings

2

13 ASIAN STRATEGY – 10 JULY 2012

14

LOCAL PARTNERING BRAND, CUSTOMERS, DISTRIBUTION, PARTNER SUPPORT

Fifth largest bank branch network in Malaysia

India’s largest bank – 160 million customers and over 19,000 branches (including associated banks)

Bohai Insurance’s major ultimate shareholder, a large state-owned enterprise

Established 2005 – grown to sixth largest motor insurer in Vietnam

VIETNAM CHINA INDIA MALAYSIA

2

ALIGNMENT OF PURPOSE MUTUAL TRUST AND RESPECT


15

LOCAL PARTNERING MULTI-TIER TOUCHPOINTS BUILD TRUST AND CREDIBILITY 15 2

Appointment of IAG directors in all JVs This right embedded in JV agreements Board seats proportional to shareholding IAG appointees include Group CEO, Asia CEO, Asia

division senior executives

Regular engagement with country regulator - position IAG as industry advisor Partner management a priority – multi-level

relationships developed through regular contact Regular monitoring of partnership strength

IAG appointees to key management positions This right embedded in JV agreements Deputy CEO plus key areas such as underwriting and

claims in early years Positions will vary between JVs – depending on need

Functional links developed between JV departments and their IAG counterparts Strong personal relationships developed through

capability transfer process Enables IAG to exert strong influence at working

levels

BOARD MANAGEMENT

STAKEHOLDER MANAGEMENT FUNCTIONAL LINKS


16

16 CAPABILITY TRANSFER DELIVERING IMMEDIATE AND SUSTAINED IMPACT 3

UNDERWRITING CLAIMS MANAGEMENT PRODUCT DEVELOPMENT

DISTRIBUTION RISK RATING & PRICING CAPITAL MANAGEMENT

GOVERNANCE RISK MANAGEMENT INVESTMENT MANAGEMENT

SUPPLY CHAIN MANAGEMENT REINSURANCE RESERVING


17

Kurnia integration synergies delivered, maintain #1 position in motor

Top 3 position overall, #2 in motor

Dial up ownership to 49%¹, profitability achieved by FY15, GWP A$1bn² by 2016

Bohai capability transfer plan complete, profitability achieved by FY15, GWP A$900m² by 2017

Investment increased to 49%¹, top 3 motor insurer

BUSINESS GOALS – HORIZON 3, BEYOND 2015 BOOSTING FOOTPRINT AND SECURING SCALE POSITIONS

MALAYSIA

THAILAND

INDIA

CHINA

VIETNAM

Market entry achieved, capability transfer model implemented INDONESIA

¹ Subject to foreign ownership regulations ² Subject to FX movements


18

FINANCIAL GOALS DELIVERING PROFITABLE GROWTH IN THE MEDIUM TERM

ESTABLISHED (c.$500M) DEVELOPING (c.$250M)

INVESTMENT OF c.$720M (POST-KURNIA)

Strong returns (ROE c.10-15%) Initial start-up / development losses

ESTABLISHED (c.$500M)

Malaysia Thailand

DEVELOPING (c.$220M)

India China Vietnam

Regional development costs – peak of approx. $25m per annum FY13

FY13

FY17

* ROE assumes funding mix of 70% equity and 30% debt, and is before regional development costs

Strong returns – pre development costs (ROE 15%+)


ESTABLISHED BUSINESSES MALAYSIA AND THAILAND

Duncan Brain Chief Executive Officer - AmG Insurance Berhad Head of South East Asia

20

MALAYSIA – BUSINESS OVERVIEW AmG – A HIGH PERFORMING BUSINESS

390

638

FY05 FY12

96.6%

91.4%

FY05 FY12

CURRENT PROFILE 49% owned (51% AmBank)

Annual GWP of c.RM650m (c.A$200m)

Predominantly motor (c.80% GWP)

Strong double digit insurance margin and ROE

Industry-leading expense management ratio

4th largest motor insurer – 8% market share*

8th largest general insurer – 5% market share*

Diversified distribution base – 3,000 agents, AmBank bancassurance channel

Approximately 1 million policyholders

Kurnia transaction will deliver market leading positions

AmG INSURANCE - COR (%)

AmG INSURANCE - GWP (RMm)

Note: All figures based on AmG’s financial year end 31 March * As at 31 December 2011


21

11.0 11.5 11.3 12.0 13.0 14.0

2006 2007 2008 2009 2010 2011

MALAYSIA - MARKET ENVIRONMENT SOUND GROWTH OUTLOOK IN CONSOLIDATING MARKET

MALAYSIA GENERAL INSURANCE GWP (RMbn) Economic growth of 5% in 2011, 4-5% forecast for

2012

General insurance market grew by 8% in 2011

– Forecast average growth of ~7% per annum until 2016

Comprehensive motor is profitable, subsidising unprofitable tariffed third party bodily injury (TPBI)

TPBI subject to positive regulatory reforms

Consolidating market – AmG an active participant via Kurnia

Detariffication leading up to 2016

– Will impact competitive environment

– Scale players will possess distinct advantage

95% 98%

111% 102%

98% 97%

2006 2007 2008 2009 2010 2011

MALAYSIA MOTOR PROFITABILITY - COR (%)

Source: PIAM

Source: PIAM


22

CAPABILITY TRANSFER DELIVERING IMMEDIATE AND SUSTAINED IMPACT

UNDERWRITING CLAIMS MANAGEMENT PRODUCT DEVELOPMENT

DISTRIBUTION RISK RATING & PRICING CAPITAL MANAGEMENT

GOVERNANCE RISK MANAGEMENT INVESTMENT MANAGEMENT

SUPPLY CHAIN MANAGEMENT REINSURANCE RESERVING


23

ADDING VALUE THROUGH CAPABILITY TRANSFER CLAIMS RE-ENGINEERING – SIGNIFICANT SAVINGS

Significant re-engineering and process improvement – Centralisation of claims operations – Robust repairer management practices – Supply chain selection and management – Strong focus on fraud detection and prevention – Changes in authorities and duties

Strengthened bodily injury claims process – Stringent lawyer selection and management – Probabilistic approach to claim settlements – Improved staff capability and competency – Proactive approach to claims management – Improving claims performance contrasts with

industry trend – Stable ultimate loss ratio (ULR) for last 2 years –

now reducing

AVERAGE COMPREHENSIVE CLAIMS COST (RM)

AVERAGE FINALISED TPBI NET CLAIMS COST (RM)

31,488

26,187

FY09 FY12

4,800

5,000

5,200

5,400

Mar '10 Jun '10 Sep '10 Dec '10 Mar '11 Jun '11 Sep '11 Dec '11 Mar '12

Re-engineering of Claims Operations


24

ADDING VALUE THROUGH CAPABILITY TRANSFER INCREASED REVENUE VIA PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT Product wordings, pricing, underwriting, sales &

underwriting process, claims, regulatory approvals

Range of product initiatives, retail and commercial

Extended warranty product introduced – most successful

– High penetration into banking customer base – achieved a peak of 69% of all used car loans

– Generated 10% top line growth for AmG

Recently launched new ‘contract warranty’ product early 2012

EXTENDED WARRANTY GWP (RM) – LAUNCHED 2007

Year 1 Year 2 Year 3 Year 4

1.1 m

12.8 m

43.6 m

50.1 m


25

PRICING MODELS DEVELOPED Data extraction techniques Risk segmentation analysis Price modelling

– Preparation for detariffication Opportunistic marketing

– ‘Working the tariff’ Kurnia integration to positively influence UNDERWRITING / RISK ACCEPTANCE Development of new business rules Analysis of underwriting outcomes Distribution and core systems development

ADDING VALUE THROUGH CAPABILITY TRANSFER UNDERWRITING AND PRICING

LOSS RATIO BY SEGMENT LOSS RATIO BY SEGMENT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Marketing to attract

Motor risk segments


Loss ratio benchmark

Marketing to de-emphasise

26

170

220

270

320

370

420

470

520

0%

50%

100%

150%

200%

250%

Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12

RM' milCAR (%)

Total Capital Available (TCA) Total Capital Required (TCR) CAR CAR Minimum Tolerance (130%)

ADDING VALUE THROUGH CAPABILITY TRANSFER IMPROVED CAPITAL AND ASSET MANAGEMENT

CAPITAL ADEQUACY RATIO BALANCE SHEET MANAGEMENT Strengthening CAR due to higher

earnings, investment de-risking, and claims process improvement – New investment policies – De-risking investments – optimise for

RBC – Established sensitivity tools to optimise

allocation through the cycle – Duration matching investments vs

claims liabilities – More effective cash management – Impacting average outstanding claims

provisions by reducing claim costs and turnaround times


27

KURNIA ACQUISITION* DELIVERS MARKET LEADING POSITION

REDEVELOPED AmG 5 YEAR STRATEGY (2009) Clear strategy developed for AmG

– Achieve number 1 position in motor - leverage scale – Lead in niche commercial lines – Lead in select personal lines

KURNIA: CLEAR STRATEGIC ALIGNMENT Creates scale position in motor, leveraging supply chain,

risk selection, claims and customer management Leading market position - 22% in motor,13.5% overall Creates the largest motor insurer in Malaysia

– GWP of RM1.7bn (A$530m) – 4 million customers, 7,000 agents – RM50m of expected synergies over 2 years

CLEAR MARKET LEADER IN MOTOR – 22% COMBINED SHARE

8% 12%

8% 7% 7% 6% 5% 5% 4% 4%

20%

AmG Allianz MSIG P&O Tokio Zurich / MAA

AXA Uni.Asia Berjaya Etiqa Others

Kur

nia

22%

Source: PIAM (as at 31 December 2011)

* Completion expected second half calendar 2012


28

Kurn

ia

AmG

Com

petit

or 1

Com

petit

or 2

Com

petit

or 3

Com

petit

or 4

Com

petit

or 5

Com

petit

or 6

Com

petit

or 7

Com

petit

or 8

Com

petit

or 9

Com

petit

or 1

0

Com

petit

or 1

1

Com

petit

or 1

2

Com

petit

or 1

3

Com

petit

or 1

4

Com

petit

or 1

5

Com

petit

or 1

6

Com

petit

or 1

7

Com

petit

or 1

8

Com

petit

or 1

9

Com

petit

or 2

0

Total unaided recall Top-of-mind

KURNIA AND AmG STRONGEST BRANDS IN MOTOR INSURANCE

Source: ACORN research conducted for AmG

Kurnia and AmAssurance are the top two motor insurance brands in Malaysia While consumers have relatively solid unaided recall of most brands, Kurnia and AmAssurance enjoy substantially

greater top-of-mind (TOM) awareness


29

MALAYSIA FOCUS FOR THE FUTURE

NOW

EXPECTED OUTCOMES: Sustainable #1 position in motor Maintain two of the strongest general insurance brands in the industry Deliver synergy targets and improved profitability

Clear integration plans developed Value retention and attainment Full integration by 2014

Leverage / optimise scale Operational excellence –

systems, processes and controls Developing network focus

Pursue greater innovation in product and marketing

Grow high-margin lines Cross-sell into significant

customer base


INTEGRATE KURNIA CONSOLIDATE LEADING POSITION

CONTINUED PROFITABLE GROWTH

30

THAILAND – BUSINESS OVERVIEW SAFETY INSURANCE – A LEADING MOTOR INSURER

One entity comprising:

– Safety Insurance (c.80% of GWP) – predominantly motor

– NZI Thailand (c.20% of GWP) – predominantly commercial

Annual GWP c.THB6bn (c.A$190m) – approximately 1 million policyholders

Long term insurance margin 6-8% generating strong ROE

Portfolio adjusted, consistently outperformed the market

6th largest general insurer – 4.3% total market share*

3rd largest motor insurer – 5.4% motor market share*

46 branches and service centres nationwide

Historically strong in Bangkok and southern regions – recent diversification

*As at 31 March 2012 (Source: OIC)

SAFETY BRANCH NETWORK

West (4)

North (5) North East (9)

East (3)

South (16)

Central (9)


31

95 101 106 110 124

140

2006 2007 2008 2009 2010 2011

THAILAND GENERAL INSURANCE GWP (THBbn)

THAILAND - MARKET ENVIRONMENT HARDENING MARKET POST FLOODS

Source: OIC/ BMI

98% 100% 95% 97% 98%

201%

2006 2007 2008 2009 2010 2011

THAILAND PROFITABILITY - COR (%)

Sound general insurance market growth

– Forecast average growth of over 7% per annum until 2016

– Significant rate increases, post-floods

Market remains fragmented and competitive ~ 70 players

Industry profitable pre-2011 floods – lower insurance margins but on lower capital base

Transition to full risk-based capital (RBC) regime underway

Expect industry restructuring to occur

– Post-flood constrained capital positions

– Increased regulatory action, including RBC enforcement

– Lead to further opportunities

Economic post-flood rebound – driven by public spending and recovery in industrial activity


32

ADDING VALUE THROUGH CAPABILITY TRANSFER STRONG PERFORMANCE RELATIVE TO INDUSTRY

OUTPERFORMED INDUSTRY - ONE OF LEAST IMPACTED BY 2011 FLOODS Safety COR at or below market – portfolio adjusted

Significantly less flood exposure – Geographic diversification strategy – Product diversification – lower exposure on more risky lines – Restructuring of reinsurance in 12 months prior to floods

LEADS INDUSTRY ON EFFICIENCY Low cost operating model

– Administration ratio approximately 10.5% – Significantly lower than industry, and leading motor insurer

Efficient business processes, good use of technology – Claims process is market leading

96% 95%

98%

201%

2010 2011

Safety

Market

47%

IAG Re flood loss

COMBINED RATIO

Source: OIC


33

ADDING VALUE THROUGH CAPABILITY TRANSFER LOW COST - ADVANCED CLAIMS MONITORING AND ASSESSMENT

LEVERAGING TECHNOLOGY TO DELIVER SUPERIOR CLAIMS MANAGEMENT

CLAIMS MANAGEMENT EFFICIENCY ALIGNS WITH STRONG CUSTOMER FOCUS

Claims control centre – real time GPS tracking of accidents Motor-bike enabled assessors – dispatched to scene of

accidents, all activity is monitored

Accident scene data captured on the spot Facts and evidence reduce fraud Accident repairs are directed and controlled Customers get instant quality service


34

STRATEGIC ORGANIC EXPANSION Bangkok – competitive motor insurance territory

Established target regions for branch expansion

– Under serviced / targeting specific competitors

Measured approach

– 2 to 4 branches per year only

– New branches sustain loss in first 1 to 2 years

– Training staff “Safety Way” critical

6 – 8% lower loss ratio in non-Bangkok branch network

ADDING VALUE THROUGH CAPABILITY TRANSFER STRATEGIC GEOGRAPHICAL EXPANSION

SAFETY GWP - % NON-BANGKOK


26% 26% 25% 27%

31% 35%

38%

43%

48% 51%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD

Pricing/underwriting – Data management –

collection, extraction, analysis, rating analysis and selection

– Product and underwriting Controlled organic growth Product development initiatives

35

ADDING VALUE THROUGH CAPABILITY TRANSFER SUSTAINED IMPROVEMENT IN SAFETY INSURANCE

3.5

4.9

FY07 FY11

100.4%

95.0%

FY07 FY11

COR (%) GWP (THBbn)

Low cost operating model – Sustainable advantage in cost

leadership

Innovative claims management – Repairer management initiatives – Paperless processes – Technology leveraged GPS system – Comprehensive claims cost

(excluding flood) fell by 8%, real terms closer to 20%

AVERAGE FINALISED CLAIMS COST COMPREHENSIVE (THB)

20,170 18,629

FY07 FY11


36

THAILAND FOCUS FOR THE FUTURE

EXPECTED OUTCOMES: Build on low cost leadership position Continue to leverage competitive level of customer service and claims management Achieve a top 2 position in motor while actively managing (and growing) the non-motor business

Increase Safety’s national presence – Further increase in branches

over the next 2-3 years – Emphasis on under-

represented North, North East and East regions

Leverage Safety’s low cost operating model – Sustaining margins in a price

competitive environment – Continued rating and risk

selection to optimise business mix

– Sophisticated claims management processes

Growth opportunities may arise as a result of: – Increased regulatory

enforcement of capital requirements

– Capital strain on incumbents following floods

– Capitalisation on structural changes


OPERATIONAL EXCELLENCE ORGANIC NETWORK EXPANSION INDUSTRY STRUCTURAL CHANGES: OPPORTUNITIES?

DEVELOPING BUSINESSES INDIA, CHINA AND VIETNAM


Retail 50%

Corporate 38%

SME 12%

INDIA – BUSINESS OVERVIEW SBI GENERAL RAPIDLY EXPANDING

38

26% interest in SBI General – greenfields joint venture with State Bank of India (SBI)

Option to dial up to 49%, subject to Indian foreign direct investment limit

Building a portfolio in the corporate, retail and SME markets

GWP and start up losses in line with expectations

‒ Over 45 products in market

‒ Over 1,000 staff across 25 branches around India

‒ Over 2,000 qualified SBI bank sales staff selling SBI General Insurance products

‒ 5 SBI associate bank tie-ups Motor 13%

Home 37%

Fire 28%

Short Tail Commercial

13%

Health/ PA 4%

Others 5%

PRODUCT MIX (% GWP)

CUSTOMER SEGMENTS (% GWP)

Source: SBI General year ended 31 March 2012


204

250 281

312

358

425

2006 2007 2008 2009 2010 2011

STRONG MARKET GROWTH Overall market growth of 23%+ in year to 31March 2012

‒ Private sector 25%, public sector nearly 22% Forecast growth of 16% per annum until 2020 INDUSTRY UNDERWRITING LOSSES Price competition since detariffication driven by new entrants Public sector companies seeking to regain share lost High commercial motor pool losses Expense growth as systems, employees and processes

have developed in an unplanned and inefficient way RATE HARDENING EXPECTED Government directives to public sector companies in May

and June 2012 to cease underwriting unprofitable business in fire, health and motor

Discontinuation of Commercial Third Party Pool in March 2012 – increased reserving by public sector companies

INDIA - MARKET ENVIRONMENT STRONG GROWTH, RATE HARDENING LIKELY

39

INDIA GENERAL INSURANCE GWP (`bn)

Source: IRDA


SBI GENERAL FOCUSED ON DELIVERING PROFITABLE GROWTH 40

Over 50% of business sourced from SBI at known commission rates Lower than industry average distribution expense delivers distinct cost

advantage DISTRIBUTION COST

ADVANTAGE

Upfront investment in scalable systems enables rapid expansion without equivalent increase in costs – will be the lowest cost provider in the market

Extensive deployment of capability from IAG SUPERIOR BUSINESS

MODEL

Access to all SBI corporate accounts and ability to selectively underwrite Disciplined approach to risk-based underwriting – price for risk, not to win the

business SCALE ENABLES

SELECTIVE UNDERWRITING

Profit (not top line) focused SBI track record of achieving profit in new ventures – eg SBI Life JV was first

private sector life company to break even SBI MINDSET AND TRACK

RECORD

40 ASIAN STRATEGY – 10 JULY 2012

INDIA FOCUS FOR THE FUTURE

EXPECTED OUTCOMES: Leveraging SBI’s brand and distribution strength to secure a sustainable, profitable, scalable position By 2016 – top 3 position in private sector with 5% market share, equates to A$1bn* GWP Profitability by FY15

41

Branches being rolled out rapidly to support top line growth targets

Technology and processes driving cost efficiencies

Full product range to be offered

Bancassurance is the priority, but develop all channels over time – bancassurance, broker, agent and online

SBI relationship and customer base leveraged for lead generation in broker, corporate and SME channels

Disciplined approach to risk based underwriting

Developing best in industry claims management processes

Extremely well placed to capture rate hardening


SYSTEMS, PRODUCT AND BRANCH ROLLOUT

CHANNEL AND SEGMENT DEVELOPMENT UNDERWRITING AND CLAIMS

* Subject to FX movements

42

CHINA – BUSINESS OVERVIEW BOHAI – REGIONAL FOCUS

42

Licensed in 2005 Annualised GWP in excess of A$200m Strongly capitalised Motor focus (c.85% of GWP) Broad distribution network

– c.50% sales from direct selling (265 provincial and sub-branches, and national telesales centre)

– c.50% sales from agency workforce Majority owned by TEDA companies

– Strong government support 3,000 employees National licence, with strategic focus on the important

pan-Bohai region (c.30% of China’s GDP)

Tianjin (Bohai HQ)

Pan-Bohai region – strategic focus

Other provinces with Bohai branches

BRANCH NETWORK


CHINA - MARKET ENVIRONMENT STRONG NON-LIFE INDUSTRY PROFITABILITY

-1000

0

1000

2000

3000

4000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NP

AT

(US

D M

)

66.3% 63.1% 61.2%

38.2% 34.2% 34.0%

0% 20% 40% 60% 80%

100% 120%

2009 2010 2011

Claims Ratio Expenses Ratio Source: CIRC / BMI

CHINA NON-LIFE COMBINED RATIOS 2009-2011

43

LOCAL OPERATORS DOMINATE THE INDUSTRY Domestic insurers are profitable, compared to foreign

players which remain small (1% share) and unprofitable Industry profitability driven by

– Increased regulatory focus (solvency, commission, pricing)

– Improved discipline from listed majors MARKET DEVELOPMENTS Listed majors were formed in 1990s – loss of market

share to newer entrants 27 new licences since 2004 – around two-thirds of all

domestic licences on issue For first 5 years, new entrants focused on building

networks and expertise with divergent results – Scale businesses built at expense of profitable growth – Niche players with targeted geographic, product or

service offerings (including Bohai)

CHINA NON-LIFE NPAT (US$M) 2002-2011


44

Bohai ceded business in 2010 and 2011 to rebalance its portfolio to profitable lines - now forecast to grow at 15-25% per annum over the next 3 years

IAG will capture this growth via its 20% strategic investment, with an in principle dial up right to 25%*

BOHAI FOCUSED ON DELIVERING PROFITABLE GROWTH

CAPTURE SYSTEM GROWTH

ACCESS DISTRIBUTION AND GOVERNMENT

SUPPORT

EXERT OPERATIONAL INFLUENCE

ACHIEVE PROFITABILITY TARGETS

National licence with 25 provincial branch licences and 240 sub-branches – value reinforced by regulator’s increased restriction of new branch approvals

TEDA has strong central and regional government support - ensures regulatory approvals and access to regional business in Bohai area

Shareholders and management team highly receptive to IAG capability transfer, with IAG board and management appointments in key areas

Defined capability programme centres on four areas: underwriting, claims, branch performance, technical improvements (pricing and risk selection)

TEDA is only interested in profitable growth - aligned to IAG’s goal Profitability by FY15

* Subject to foreign investment regulations


45

CHINA FOCUS FOR THE FUTURE

EXPECTED OUTCOMES: Increased market share – GWP of A$900m* by 2017 Operational improvement Profitability by FY15

Implement more stringent and effective underwriting control and risk selection

Centralised underwriting model adopted

IAG actuaries assisting with analysis to enable more granular risk selection

IAG appointment to Head of Motor Underwriting

Improve claims management and customer service standard

Centralised claims model adopted, pilot test underway

IAG appointment to Head of Claims Department

Optimise branch performance to enable geographic focus on pan-Bohai area

Branch-by-branch review commenced

IAG appointment to Head of Customer Service


UNDERWRITING CLAIMS BRANCH PERFORMANCE

* Subject to FX movements

46

Individual agents 88%

Bank customers

7%

Institutional agents 4% Broker 1%

VIETNAM – BUSINESS OVERVIEW AAA RESPECTED BRAND

Established in 2006

– Extensive national branch network

– Over 700 personnel and 105 branches and processing centres

– Well known national brand positioning for quality service – peace of mind

– Headquartered in Ho Chi Minh City

Market share of AAA in 2011

– #6 for motor segment (5.5% by direct premium)

– #9 overall (2.2% by direct premium)

Motor 80%

Short Tail Commercial

11%

Health/ PA 5%

Liability 1%

Other 3%

PRODUCT MIX (% GWP 2011)

DISTRIBUTION CHANNELS (% GWP 2011) NATIONAL BRANCH NETWORK

VIETNAM

Hanoi

Ho Chi Minh City


47

7,000 8,350

10,855

13,644

17,052

20,628

2006 2007 2008 2009 2010 2011

VIETNAM - MARKET ENVIRONMENT STRONG GROWTH OUTLOOK

VIETNAM GENERAL INSURANCE GWP (VNDbn)

Source: AVI

Strong economic fundamentals – 2011 GDP grew 5.9% – Average annual GDP growth forecast of 7% until 2016

Large young urban middle class, household wealth increasing rapidly - underpins demand for insurance

General insurance market – Least volatile and most underpenetrated in SE Asia – Motor is under-represented (30% share of business lines

in 2011) relative to other SEA countries – Forecast to grow ~18-20% p.a. until 2020

Market share of top 4 (all state-owned enterprises) has shrunk from 86% in 2005 to 69% in 2011

Industry dominated by local operators and brands - wholly owned foreign entrants have failed to gain meaningful position

Pace of regulatory reform has increased, aimed at building a modern and professional insurance industry


48

AAA has exceeded system growth of 24% since establishment in 2006, and is forecast to grow at 20+% p.a. over the next 3 years

IAG will capture this growth via its 30% investment, with a dial up right to 49%*

AAA ASSURANCE FOCUSED ON DELIVERING PROFITABLE GROWTH

CAPTURE SYSTEM GROWTH

ACCESS DISTRIBUTION AND STRONG LOCAL

RELATIONSHIPS

EXERT OPERATIONAL INFLUENCE

ACHIEVE PROFITABILITY TARGETS

National distribution network and brand - 105 branches and processing centres, with strong agency franchise

Private company - Chair (majority shareholder) has strong local relationships

Shareholders and management team highly receptive to IAG capability transfer, with IAG board and management appointments in key areas

Defined capability programme centres on three areas: risk & controls, efficiency & profitability, and opportunities & growth

New business, still in investment stage - beginning to leverage scale, which will be enhanced via IAG capability transfer initiatives

Breakeven target FY15

* Subject to foreign investment regulations


49

VIETNAM FOCUS FOR THE FUTURE

EXPECTED OUTCOMES: Increased market share to top 3 motor insurer Operational improvement Breakeven by FY15

Catastrophic risk management - Insurance risk - Investment risk

Product exposure Operational controls Underwriting acceptance Governance Performance tracking

Claims programme Technology and work processes Pricing

Products Marketing New distribution opportunities

- Bancassurance - Call centre / direct marketing


RISK AND CONTROLS EFFICIENCY AND PROFITABILITY OPPORTUNITIES AND GROWTH

PANEL DISCUSSION

Mike Wilkins Managing Director & Chief Executive Officer, IAG

Tan Sri Azman Hashim Chairman, AMMB Holdings

Pratip Chaudhuri Chairman, State Bank of India

SUMMARY AND Q&A

Mike Wilkins Managing Director & Chief Executive Officer


52

IAG’S EXPANDING ASIAN PRESENCE PORTFOLIO OF ESTABLISHED AND DEVELOPING BUSINESSES

THAILAND MALAYSIA INDIA CHINA VIETNAM

98.6% 49%




¹

ESTABLISHED

DEVELOPING


¹ Completion expected second half calendar 2012 ² Subject to foreign investment regulations

53

ASIA INVESTOR BRIEFING KEY TAKEOUTS 53

IAG has a portfolio of quality businesses to capitalise on the substantial growth in Asia

Competitive advantage comes from a robust and disciplined approach to market entry, partner selection and capability transfer

Significant value creation expected over the medium to longer term

1

2

3


54

APPENDIX ASIA MANAGEMENT & OPERATING STRUCTURE

JUSTIN BREHENY Chief Executive Officer

Head of Strategy, M&A, Legal (Singapore)

Appointed in March 2006 – 20 years working and living in Asia Formerly with ANZ as GM Asia, managing strategic expansion of

ANZ’s Asia branch network in China, Hong Kong, Philippines, Taiwan, Vietnam, Indonesia, Singapore, Malaysia and Thailand

Other roles included Group Rep Malaysia, GM Shanghai; President China; MD China Partnerships; Executive Director Panin Bank (Indonesia)

DUNCAN BRAIN

CEO, AmG Head of SE Asia

(Malaysia)

Joined IAG in 1998 and appointed IAG’s Head of South East Asia in 2005 and CEO of AmG in 2010

Previously General Manager, Swann Insurance (in Australia)

More than 20 years experience in the insurance industry working in actuarial, product and underwriting, reinsurance and general management

54

DAVID SOUTHWELL

Head of Vietnam (Vietnam)

Joined IAG in 2003 Held senior roles including

CFO for IAG’s Asia division and Senior Manager, Group Finance

Previously worked with KPMG and several banks across Sydney, London, Thailand and Vietnam

MARC NOURSE

Joined IAG in 2002 Five years in China

where he led IAG’s strategic development in China and was CEO of IAG’s China-based roadside assistance business, CAA

Marc is also a lawyer, admitted in Australia and UK and was previously Deputy General Counsel for IAG

Chief Financial Officer (Singapore)

VINCENT TAN

Joined IAG in 2011 Previously regional

Financial Controller for CIGNA Asia and CFO for its Thailand start-up

More than15 years experience in insurance industry in both local and regional capacity

SHIRLEY LEE

Head of Human Resource (Singapore)

Joined IAG in 2011 Previously Head of

Operations and HR with AXA Life Insurance (Singapore) and AXA Wealth Management (Asia)

Over 20 years in the life insurance and financial services industry with AXA, Prudential and AIA

CHOO SEONG WOH

Head of China & Chief Risk Officer

(China)

Joined IAG in 1989 Previously IAG’s Group

Chief Underwriting Officer, Head of R&D and Head of Actuarial Services

25 years experience in IAG in various roles in Asia, Australasia and the UK

Currently Chief Advisor to CIRC and Visiting Professor of Renmin University, Beijing

ROB LOGIE

Head of India Deputy CEO SBI General

(India)

Joined IAG in 1998 and was appointed Head of India in 2008 and Deputy CEO for SBI General in 2009

Previously held senior management positions within IAG’s Australia Direct operations and led the demutualisation and listing of IAG on ASX

Over 16 years experience working in the GI sector in Australia and India

SUTEECHAI SANTIVARAKUM

CEO, Safety Insurance (Thailand)

Joined Safety Insurance in 1997 as the CFO and appointed CEO in 2007

Has nearly 30 years experience in financial services

Previously held senior positions within Jardine Fleming Thanakom Securities Limited and National Finance & Securities Plc, in Thailand


55

APPENDIX BIOGRAPHIES OF PANELLISTS

SHRI PRATIP CHAUDHURI

Shri Pratip Chaudhuri is the Chairman of State Bank of India (SBI), a 205 year old organisation and India’s largest Commercial Bank. With more than 19,000 branches and 27,000 ATMs, the State Bank Group includes besides SBI, 5 associate banks and 22 subsidiaries including 8 foreign subsidiaries to form a formidable financial powerhouse. SBI is often referred to as a Proxy for the Indian economy. SBI is the only Indian Bank to feature in the Fortune Global 500 list. Shri Pratip Chaudhuri assumed the Chairmanship of State Bank of India on 7 April 2011. In this role, he is not only the Chief Executive of India's largest commercial bank, but also the head of the entire State Bank Group. Born on 12 September 1953, Mr. Chaudhuri holds a post graduate degree in Business Administration with specialisation in Finance. Mr. Chaudhuri joined State Bank of India as a Probationary Officer in the year 1974. Immediately prior to taking over as Chairman, he was Deputy Managing Director in charge of the International Banking Group of the Bank. During his tenure of 37 years in State Bank of India, Mr. Chaudhuri has held a number of important positions, including those of Chief General Manager (Foreign Offices), Chief General Manager of Chennai Circle and General Manager (Mid Corporate Group). Shri Chaudhuri was also the Managing Director of State Bank of Saurashtra, and piloted its merger with State Bank of India. Chairman, State Bank of India

TAN SRI AZMAN HASHIM, AO

Non-Independent Non-Executive Chairman, AMMB Holdings Berhad

Tan Sri Azman Hashim was appointed to the Board of AMMB Holdings Berhad in August 1991 and has been the Chairman of the company since 1991. He is also the Chairman of the Board of several subsidiaries of the company. Tan Sri Azman is a Chartered Accountant (FCPA) Australia, a Fellow of the Institute of Chartered Accountants and a Fellow of the Institute of Chartered Secretaries and Administrators, Australia. He has been in the banking industry since 1960 when he joined Bank Negara Malaysia. Tan Sri Azman is the Executive Chairman of Amcorp Group Berhad and RCE Capital Berhad and Chairman of Malaysian South-South Corporation Berhad, MCM Technologies Berhad and the Institute of Bankers Malaysia. He serves as a member on the Board of Pembangunan MasMelayu Berhad and the Asian Institute of Finance Berhad and is also involved in several charitable organisations including as Chairman and Trustee of AmGroup Foundation. Tan Sri Azman is Chairman of Malaysian Investment Banking Association, Malaysia Productivity Corporation, the Asian Productivity Organisation, Chairman Emeritus of Pacific Basin Economic Council (PBEC) International; Co-Chairman of Malaysia – Singapore Roundtable and President of Malaysia South-South Association, Malaysia-Japan Economic Association, Malaysian Prison FRIENDS Club and Non-Aligned Movement’s (NAM) Business Council and Treasurer of Malaysia-Australia Foundation. He is also a Member of the APEC Business Advisory Council, the Trilateral Commission (Asia-Pacific Group), East Asia Business Council and the Malaysian-British and Malaysia-China Business Councils; Leader of the ASEAN-Japanese Business Meeting (Malaysia Committee, Keizai Doyukai) and on the Board of Advisors of AIM Centre for Corporate Social Responsibility. He is the Pro-Chancellor of Open University Malaysia and a member of the International Advisory Panel of Bank Negara Malaysia International Centre for Education in Islamic Finance (INCEIF). Tan Sri is also an Honorary Officer of the Order of Australia.


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