Ian Brown is deputy chief executive of the Insurance Australia Group limited (formerly NRMA Insurance Group). Before joining the Group in 1999, he was managing director of SGIO Insurance Limited. Previous roles include general manager for New Zealand at Security & General Insurance (The Lumley Group) and state general manager Western Australia for QBE Insurance Limited. He is a former president of AIM WA.
AIM: How long did it take for management to get over the ructions that bedevilled NRMA in the past?
Brown: Management has concentrated on the business and left the politics at board level. The focus has never really been off the business. Even during the time when there was disharmony at board level, it was not going down through the organisation.
AIM: What measures have been taken to ensure a smooth working relationship between the board and management?
Brown: Most of the board of IAG are relatively new and are focused on the long-term strategy. The demarcation between that and operations has been clearly defined. That structure is now working effectively. We don’t have management saying they can’t make a decision because the board hasn’t said so.
AIM: What management challenges did demutualisation and listing create?
Brown: The biggest challenge since demutualisation is making sure we keep growing the business. The more you can spread the risk, the better you can meet the cost base. Diversification is one of the biggest challenges; not just geography, but also with products and ensuring we deliver the highest quality service.
AIM: There’s a risk, though, isn’t there?
Brown: There’s always an issue when a company changes. People think that because you are focused on profit, customer service suffers. You won’t grow the business unless you are still performing. If anything, the focus is on making sure that we are giving even better customer service. Under a mutual, where customers were members, there was the loyalty factor for them to stay with us no matter what the level of service. Now, we have to compete with the rest of the industry.
AIM: What lessons did you learn from the integration of SGIC with SGIO and later SGIO and NRMA?
Brown: I learned that when you are dealing with companies that are interstate, the local support that’s important for those businesses to survive still needs to be maintained. But you’ve got to integrate them so that you get the synergy benefits expected. If you try to get everything perfect before you make a decision, integration takes too long. And the longer you leave it, the harder it gets because people become more entrenched in wanting to keep things the same. There are tough decisions integrating any business, but the quicker you make them, the better for staff eventually.