Good morning, everyone, and welcome to the 2026 Annual General Meeting of the Insurance Australia Group Limited. I am Tom Pockett, the Chair of IAG. The Group Company Secretary has informed me that we have a quorum, so I formally open our 2026 AGM. The notice of meeting was published on the ASX and sent to shareholders. It sets out the items of business we will be considering at today's meeting, and I will take this notice as read. In keeping with the commitments that we made in our Stretch Reconciliation Action Plan, we are delighted to welcome Aunty Norma to officially welcome us to Gadigal country, where we are holding our meeting. Aunty Norma.
Good morning. I do like to acknowledge and welcome you all in my language, my Aboriginal language. [Non-English content]. So, I have just said hello to you. I am Aunty Norma Ingram, Aboriginal Elder. I respectfully acknowledge this aunt or uncle, so feel free. You do not have to, but feel free to call me Aunty Norma if you like. It just shows that cultural respect. I am actually Midwest New South Wales. I do not know if any of you know the Lachlan River and a town called Cowra, but I was born and raised on the Aboriginal reserve there at Cowra, the youngest of 11 children. This morning, however, I hope you are all well this morning. The weather seems much, much nicer this morning. But it is my pleasure and responsibility as an Aboriginal Elder to welcome you to country.
So where we are now, we are on Gadigal country. So Gadigal is one of 29 small family or clan groups within , we talk about the Eora nation. So, we have clan groups, and we have the nation. As a matter of fact, we have over 200 different Aboriginal nations across this country. So we acknowledge and recognize that concept in Europe. We are just sort of saying that, yeah, this is what happens here in Australia, that we have different Aboriginal nations. Same culture but different languages, different priorities because of whether we are desert people, rainforest people. The Gadigal people, for example, are saltwater, sunrise people. I am freshwater. So these things are what make us up as Aboriginal people. My friends, we do not go by the color of our skin or the look on our faces.
It is these things that make us Aboriginal and makes us very important and respectful as Aboriginal people. The Gadigal people, their totem is the whale. It goes up as that beautiful, big mammal, the whale. The Gadigal people have been here on this land, and it is a Western concept, but have been on this land for some people say over 65,000 years. I say, as an Aboriginal person, we have been here forever. That kind of number of years kind of gives us a bit of an understanding of the longevity and the long time that we have been on this country, and that we have continued to care for country. So welcome to country is acknowledging. The Gadigal go from our beautiful harbor, our wonderful, beautiful harbor. I do not know if you are all Australians or you are visitors or whatever, but we have the most beautiful harbor in the world.
Yeah, not ashamed to say that. It goes out to Newtown Station, across to Parramatta Road and over this side. So that is Gadigal country. It is a small part, it is a small clan group land mass because we did not have to go too far to find our food and our living. We have looked after country. We have looked after what I call my siblings, so Mother Earth's children. It is not just the human beings. It is not just us people. It is our trees. It is our plants. It is our animals. It is everything. We have a responsibility for that. So as with families, we take care of each other. We take care of them, and they take care of us. Without the food, without meat, without seafood, without water, we will not exist. So it is very important for us to take care of the land, Mother Earth.
We will continue to do that. Our 200 different Aboriginal nations have been doing that for 65,000 years or more across this country. We are only 3% of the Australian population at the moment, my friends. That means it is 97% of other people who have come here to make this their home, whether it is 200 years ago, whether it is recently. But we are all living off the land. We are all living off this beautiful country. What we try to do is to say, "When you walk this country, we want you to be safe. We want you to be taken care of." That is what it is all about. It is about acknowledging nature, acknowledging Mother Earth, acknowledging our people, and acknowledging our culture and paying respect to that and continue to do that.
It should not just be up to Aboriginal people to take care of country, to say the land is very special, the land is precious. That is for all of us. We all have a responsibility to make sure that we are looking after our land. Just one thing I always ask people: Do you know the Aboriginal land that you live on now? No? Yes? Yeah. That is wonderful. Some people say, "Yeah." Or do you know what Aboriginal, if you were born in this country, what Aboriginal land you were born on? Just maybe a first step for you to look at what Aboriginal culture is all about. Look at what Welcome to Country is all about. Because we need to keep taking care of our country. We need to keep doing that and showing respect. I want to also acknowledge our elders.
Most certainly our Aboriginal elders, but all elders. Because all elders are precious to us. They are the ones. They are our teachers. They are our philosophers. They are our counselors. They are the people we go to when we need to for whatever, for advice or just for a big hug. Go talk to your grandmother, your grandfather, and just get that big hug. Unfortunately for me, I did not get my parents' stories, and I am really sorry that I did not do that. So if you have that opportunity, if you have the chance, and if you are grandparents, go talk to your grandchildren too and show them, talk to them, tell them about you and your story. Because that is what we are as Aboriginal people. Our culture is about storytelling. We tell our stories in a number of different ways. We have seen artwork here. That is storytelling. We have seen dances. We have heard the songs.
And so what we do with our clap sticks, we let Mother Earth know that we were walking on land, that we are going to protect her because we want her to protect us. It is just to make noises to make sure that she knows that we are there and we mean her no harm. So acknowledging our elders past, the ones who have gone before us, acknowledging our elders there now. And of course, we do need our future leaders. So I want to acknowledge the future generations that are coming up because we do need that. So I am sure you will have a wonderful day today, a wonderful morning. It is all about insurance, and we all need insurance. We all must have insurance one way or another. And really, for me, that is what Welcome to Country is. That is about insurance. That is making sure that we are looked after.
So all of that in our heart and our souls as well as our physical. So enjoy your day. Make some good decisions, Mr. Chair, and the board, make some good decisions, which I know you will. And thank you for having me back again to Welcome you to Country. Thanks everybody, and welcome.
Thank you, Aunty Norma. Wonderful Welcome to Country as always. I would now like to introduce the IAG Board of Directors to you. On the stage with me starting from my far left, Michelle Tredenick, George Sartorel, Wendy Thorpe, Penny MacRae, our Group Company Secretary. And on my right, starting closest to me is Nick Hawkins, our Managing Director and Chief Executive Officer; JoAnne Stephenson; Simon Allen; Scott Pickering; Helen Nugent; and George Savvides. Also in attendance are Brendan Twining and Scott Guse, Lead Audit Partners from KPMG. I acknowledge that this is Brendan's last AGM after five years and thank him for all he has done for us. I also welcome our new partner, Scott. And we are joined by representatives of the IAG Leadership Team.
Finally, at the lectern on my far left is Kylie Smith, EGM of Corporate Affairs and Sustainability, who will read the questions submitted online during the meeting of shareholders. I now declare the poll open on all resolutions. This means you can submit your votes now. Before we begin, Penny, our Group Company Secretary, will briefly give you directions on a few procedural matters. Penny.
Thank you, Tom. Today, we have shareholders joining us in the room, online, and by phone. Welcome all. To ensure an orderly meeting, I will highlight a few safety and housekeeping matters for you. For those of you in the room, in case of an emergency, please follow the instructions from the fire wardens. If we do need to evacuate, you can leave via the fire exits at the back or on either side of the stage. Also, please switch your mobile phones to silent. Photos and recordings are not permitted today as a full webcast of this meeting will be published on IAG's website. Today, all items will be conducted via a poll. The Chair, Tom Pockett, has received the results of the direct and the proxy voting on each of our five resolutions.
The results will be displayed on the screen at the start of the meeting and then as we deal with each individual resolution through the meeting. Once the AGM is finished, the final results will be made available on the ASX, and they will also be published on IAG's website. All shareholders, whether in the room, online, or on the phone, will have the opportunity to ask questions. Please make sure you ask your question against the relevant item of business. We have received several questions and comments ahead of today's meeting, and I thank those shareholders who submitted them. The Chair and the CEO will respond to those questions in their speeches or during the relevant item when discussed. Questions will be discussed in the following order. Firstly, those received in advance, then those asked in the room, then those online, and then those on the phone.
For shareholders in the room, when you arrived today, you would have registered with Computershare outside. If you are eligible to vote and ask questions, you will have been given a white card. You can vote either by scanning the QR code on the white card or simply turn it over and vote on the back. If you need help with voting, just raise your hand and one of the Computershare representatives will come to help you. To ask a question, there are four microphones in the room, three at the bottom of the aisle down here, and a roving microphone at the back. Please just make your way to a microphone, show your white card to the Computershare representative to ask your question. If you have limited mobility and need some help, just raise your hand and the roving mic will be brought to you.
For those shareholders who have joined us online, we published an online meeting guide as part of the notice of meeting, and a copy of it is on the website. If at any time you have difficulties with the online platform, just contact Computershare on the number shown on your screen. To vote online, it is very simple. Select the Vote button at the top of the screen and either select for, against, or abstain for each of the resolutions. To ask questions, shareholders attending online simply need to click the Q&A button and follow those instructions. For those shareholders joining us online, you just log on to the same, on the phone, you just log on to the same online platform and follow the same process. To ask questions, shareholders attending on the phone simply press star one when the relevant item of business is discussed. It is very simple.
Finally, if you have a personal insurance policy or claim question, please speak with a dedicated member of the IAG team out in the foyer. At those desks, you will also have the opportunity to meet IAG's customer advocates, Jen Cobley and Georgia Whitbread. They are all here to help you. With that, I now hand back to the Chair, Tom.
Thank you, Penny. Ladies and gentlemen, I am proud to report on another year of delivering strong outcomes for our customers, shareholders, people, communities, and the environment, driven by our clear purpose to make your world a safer place. When extreme weather strikes, we deliver on our promise to make our customers' world safer by securing properties, fast-tracking urgent repairs, and arranging emergency accommodation. When other things go wrong, theft, a car accident, a breakdown in a small business machinery, travel issues, we are there to help. I am proud to report that last week, our NRMA Insurance team was awarded Canstar's Most Trusted Brand for Home and Car Insurance for 2025. Our operational scale and strength were demonstrated throughout FY 2026 as we responded to 65 weather events in Australia and 44 in New Zealand.
We paid more than AUD 12.4 billion in claims, ensuring our customers and their communities could recover and rebuild with confidence. For retail customers in Australia, this was a settlement rate of around 99%. In that context, I thank our entire team for their hard work this year. Emergency response is not the only way we make our customer world safer. We deliver innovative solutions to help them improve their resilience and proactively protect their assets. We further elevated our customer focus this year by appointing a community impact and customer advocate, enhancing the strength of our customer's voice within our organization. We have a specific focus on vulnerable customers. Our teams helped more than 25,000 customers experiencing vulnerability maintain their vital insurance cover, demonstrating our commitment to serving every part of the community.
We are pursuing two main avenues to keep insurance accessible and affordable for all Australians and New Zealanders. Firstly, through our efficiency, and also by contributing to resilience in both countries. First, on our operations. We are navigating inflation, supply chain pressures, and higher insurance costs. Our simplified, consolidated, and cloud-based technology platforms are unlocking our operational efficiencies. Our strategic focus on process efficiency is delivering transformative improvements to our customer experience, claims, sales, and service. On resilience, we are leading calls for stronger climate resilience, action on under-insurance, and a safer future. We are helping drive a system-wide approach by working with governments, regulators, suppliers, and industry partners. Our leadership is shaping a more resilient future, and it is clear from our actions this year.
We set the national agenda on risk and resilience as the presenting partner of the Australian Financial Review Insurance Summit, bringing together government, regulators, and industry leaders to discuss climate change, affordability, cyber risk, and changing customer expectations. We supported Australian small businesses via the federal government's Small Business Insurance Inquiry, outlining five key reforms to build a more resilient market. In New South Wales, we are pushing for removal of the unfair taxes on responsible people who take out insurance, and calling for the Emergency Services Levy to be removed from insurance. We are shaping New Zealand's resilience strategy through our engagement with government and ministers and agencies on our report. We're using our report, "A Long-Term Approach to Natural Hazard Risk Reduction." In both Australia and New Zealand, we continue to contribute our unique data and insights to help strengthen the resilience of our customers and communities.
For our shareholders, we achieved a strong financial performance. In FY 2026, we reported gross written premium increased by 7.6% to AUD 18.4 billion. Our insurance profit of AUD 1.6 billion equates to a reported insurance margin of 14.7%. Our underlying insurance margin was 15%, and our net profit after tax was AUD 1 billion. It was pleasing to see RACQ Insurance contribute to this year's result following completion of the acquisition in September. Our strong financial performance underpins the increased final dividend of AUD 0.20 per share, franked to 80%. This brings the full-year dividend to AUD 0.32 per share, representing a payout ratio of approximately 74% of reported net profit after tax. In a prudent move to ensure compliance with the ASX listing rules, during the settlement negotiations to resolve the Greensill litigation, we had to suspend the Dividend Reinvestment Plan for the final dividend.
Participating shareholders received their dividend as cash instead of shares. However, I am pleased to report we have successfully resolved most of that litigation as of last month, removing that uncertainty. Our strategy is delivering long-term value, evidenced by our four-year annualized total shareholder return of 20.3%. To make our people's world safer, we are building a high-performing workplace, developing future-ready skills, and inspiring sustainable action. Our people are embracing the opportunities we are offering, driving our employee engagement score to 75%, up from 73% in FY 2025. Moving on to sustainability topics, this year we released an update to our Climate Action Plan. The plan is a strategic roadmap to transitioning to a lower carbon economy and building stronger, more resilient communities.
We are building a diverse and inclusive leadership team which reflects the communities we serve, with a target of 40% - 60% gender representation across each level of senior management. The commitment to diversity starts at the top, with a board gender diversity target of 40% women, 40% men, and 20% of any gender. Female representation on the IAG board was at 40% as at 30 June. In addition, three of our four standing board committee chairs are women. Turning to our board, I would like to take this opportunity to celebrate the immense contribution of Helen Nugent, who will retire from the board in March 2027 after a decade of distinguished service. Helen has played a significant role in the board's overall stewardship of IAG across strategy, risk, governance, and long-term value creation.
She is a passionate believer in the importance of insurance to provide people with peace of mind and reduce the risk they face from increasing volatility of weather events. She also focused relentlessly on customers' experience and shares IAG's commitment to helping communities. Helen, on behalf of your fellow directors, management, everyone at IAG, and our shareholders, thank you very much. We have begun the search for a new director to continue strengthening our board, and we will advise the market in due course when we select our next director. I now invite our Managing Director and CEO, Nick Hawkins, to address the meeting to describe the strategy and the investments we are making to set up IAG for continued success. Nick.
Thanks, Chair, and good morning to everyone. I also acknowledge the traditional owners of the land to which we meet and pay my respects to elders past, present, and emerging. To our shareholders, customers, partners, and colleagues, thanks for being with us today in the room and online. Importantly, an annual general meeting is an opportunity to look at your business and hearing about how we're performing. For IAG, our performance is best seen through our customers. As Tom said, our purpose is to make your world a safer place, and we prove the value of our purpose every day, especially when people need us most. In 2026 financial year, we paid more than AUD 12.4 billion in claims, and of course, that's an enormous transfer of resources back into Australian and New Zealand households, businesses, and communities.
This year, my visits with customers affected by bushfires, by hailstorms, and by floods have reinforced the strength of why we exist here at IAG. Our frontline teams show up when it matters most, and the role they play in helping people rebuild is something that we all should be genuinely proud of. Our people are the reason IAG continues to earn the trust of millions of customers, and I thank them. Just looking at our financials, our FY 2026 results reflect the strength of our business. Our premiums reached AUD 18.4 billion. Our underlying insurance result was AUD 1.58 billion, and a net profit after tax, as Tom mentioned, was just over AUD 1 billion. Full-year dividend increased to AUD 0.32 per share, and importantly, we advanced important partnerships completing the RACQ Insurance acquisition.
We continue to work through the process for Western Australia, including last week, where we're making significant concessions to address some of the ACCC's competition concerns while underlying substantial public benefits of the proposed partnership. We expect that transaction, though, to be completed during calendar 2027. This year, we launched Ambition 2030, our plan for the next phase of our company. By 2030, our ambition is to serve more than 11 million customers, write more than AUD 25 billion in premiums, maintain a high customer engagement scores. For our communities, we'll continue to advocate for risk reduction. We'll maintain a strong voice on climate resilience under-insurance and building a safer, more sustainable future for our countries. We'll help our people thrive in a high-performing culture.
Importantly for all of you, our shareholders, we will target a return on equity of 15% or more, high single-digit earnings per share growth, and importantly, top quartile total shareholder returns. This ambition gives us a clear sense of direction as we fill our role as a customer-obsessed economic shock absorber, supported by our scale, brands, and the platforms that we have built. Our future growth is built on solid foundations. We have delivered on the goals that we set out six years ago. Customer numbers are up over 1 million. Our gross premiums are up 46%. Our reported insurance profit now over AUD 1.5 billion, and that includes a strong contribution from our Australian intermediated business, which is delivering well in excess of the target of AUD 250 million that we set. Our return on equity is above the original 12%- 13% target that we are committed to.
We have also repurchased around 5% of our shares, and importantly, we continue to use your capital efficiently. As a result, earnings per share are up 39% to over AUD 0.43 per share, and we are well-positioned for the next phase of our strategy. To achieve Ambition 2030, we have set a refreshed, growth-orientated strategy that leverages the investments we have made to help more people and businesses across Australia and New Zealand. It is built around four priorities. Through Customer Obsession, we are ensuring our business is designed around the moments that matter most to our customers. Insurance Excellence is about doing the fundamentals of running our business consistently well. Focusing on Future Fit Operations, here we are using technology and data to ensure we are building a seamless, efficient business, and we will apply those tools carefully, though. Insurance involves judgment, empathy, and accountability, especially when customers face those most difficult moments that we are involved in.
Exceptional People is ensuring our people have the skills, support, and confidence to be able to deliver. If we look at what makes our business different and why this is really important, our customer data set enable us to expand and deepen customer engagement, improve our retention, and drive growth. We have built a modern, scalable technology platform. This also sets us up well as AI integration becomes a defining factor in our industry. If you are moving through the wheel that you can see, our integrated supply chain gives us superior control over the end-to-end claims experience, which is a key strategic advantage for us. This delivers outstanding outcomes for our customers and strong economic returns for our business. We have leading brands in our trusted channels. We reinforce customer relationships at every interaction across our digital, our partner, and our intermediary channels.
Our diversified distribution model is built for growth and built for resilience. Our winning formula is kind of simple. We price risk well. We distribute products efficiently, and we manage claims consistently at scale. This is how we have earned and maintained the trust of around 9.5 million customers across Australia and New Zealand. If we take a closer look at the role of technology at IAG, and of course we are transforming by making our core technology platforms simpler, consolidated, and cloud-based. In our retail businesses, we have consolidated our personal lines pricing platforms into single, powerful engine. We have unified our claims experience by consolidating 16 platforms into one. We have moved over 8.5 million policies across 27 different brands onto our strategic common core platform. In our commercial business, we are live with our end-to-end solution for the first tranche of products.
The outcome for our customers here is even higher levels of satisfaction and improved stability and security. AI is a significant driver of our transformation going forward, and we have a clear strategy focused on three models around deploy, shape, and compose. Deploying for us puts AI in the hands of everyone at IAG, and today more than 80% of our people are regular users of AI through tools through Microsoft and other technology providers who have embedded AI in their products. Shaping for us is all about tailoring AI to specific business issues of IAG, and we now have over 600 AI activators helping our people build their capability, and we have 123 AI agents improving workflows in various functions in our business. Compose for us is where we are building higher value, more complex AI solutions at scale.
More than 2,000 employees are now using 39 of these AI solutions in claims fraud and our service teams. As adoption grows, we are scaling AI responsibly with appropriate governance, security controls, and importantly, all with human oversight. Growth is a major focus for us, and here our distribution model really is a key advantage. Across Australia and New Zealand, we operate across more channels, through more brands, and for more customer segments than any other insurer in this market. Each of our brands plays a distinct role in the market that it operates in. Our multi-channel strategy ensures we connect with customers through their preferred channel, whether that is a club, digital partners, brokers, or regional representative network that we have. Our aim is to be present wherever customers choose to engage with us and insurance.
Around 60% of our total premium income of AUD 18 billion comes from our four leading member organizations. If you are looking at those brands in a little more detail, what we have done here is we have built a differentiated business where success is driven by a unique combination of strong and growing member brands, a deeply embedded club culture, and an integrated supply chain. We look forward to expanding this in 2027 when we welcome the RAC WA's insurance team into IAG. The markets we operate in are structurally growing with general insurance premiums in both Australia and New Zealand forecast to grow at around 6% per annum through to 2030. In 2026, our direct retail businesses in Australia and New Zealand deliver growth of around 5%. These are the growth engines of IAG.
With clear strategies and strong leadership, we have the brands, technology, and distribution to grow and protect more customers. I will just finish with our financial guidance and outlook. in August, we set a strong outlook for FY 2027, guiding to gross written premium growth of 5%-8% and a reported insurance margin of 14.5%-16.5%. Based on the results for the first quarter of the financial year, I am pleased to report that the positive momentum that we saw through FY 2026 has continued in FY 2027. The business is performing in line with our expectations, and based on what we are seeing today, we remain confident in the outlook for the group and are on track to deliver against our FY 2027 guidance. Before I hand back to Tom for the business of the meeting, I thought we could take a few minutes to hear from our customers.
Here are some of the stories they've told us during the year. Of course it's a powerful reminder of the incredibly important and privileged role we get to play when people need us most.
The reality is that nobody lives in a bubble. This event happened and it was massive. My daughter was also doing year 12. She had Ross River a week after the accident here. She had three days in hospital because she was that sick. My father-in-law had just died, and I'd been his carer. Life keeps happening around you, so having the support of insurance to make sure that when a disaster of that sort of magnitude happens, that you can continue to do things is really, really important. I can say that genuinely and wholeheartedly because it did, it made a massive difference to me in what was a really, really tough year.
We were just about to go up the pool to have a swim in, and Claudia went out to get our towels and she says, "Oh my God, there's smoke everywhere out here." Thought just, it's going to be too late. Thank you, guys, for all you've done. You've been a great help. We've been with NRMA Insurance since I was a teenager.
We have lost two houses and sheds and stables and our machinery. It's all rebuildable because we are here to support each other and we're all alive. Suddenly I was like, "Phew. That's good. She's going to take" I've just made the phone calls, and she's taken all the hard yards out of it and started the organizing of the claiming. Yeah, imperative that if you don't have a good relationship with your insurance person, then you need to find one that you can have a good relationship with because I think that's really important.
I got a screenshot sent to me, someone had said my house was on fire.
This was done by a friend of ours, a very sick person at the time when he was doing this for us.
To know that you've been lucky enough to be one of those friends that he's done this for, even though he has passed away, and it has survived a fire even. I mean, how good's that? I'm glad that they did manage to keep it. They built a box around it.
Yeah, built as a box around it and put plastic wrap around it.
There was a risk it could crumble, and we knew that, but somehow they saved it. I mean, who else would do that? Normally people are just like, "Nah, too hard."
They are passionate people. That is who would do it.
Thank you, Nick. Some wonderful stories there. Turning now onto the resolutions for today's meeting as set out in the notice of meeting. The first item of business is a non-voting item to consider the financial statements for the group. Resolutions 2A and 2B relate to the re-election of non-executive directors, who we will hear from during the meeting. Resolutions Three and Four relate to remuneration matters. Resolution Five relates to the renewal of the proportional takeover provisions, which is a clause in IAG's constitution. We released the proxy results for all the resolutions ahead of the meeting, and these are now shown on the screen. As you can see, all resolutions have solid support. We will now discuss the resolutions in detail.
The first item of business is to receive and consider the financial report, directors' report, sustainability report, and auditor's report for the company for the financial year ended 30 June 2026. There is no vote on this item. These statements and reports are published in the 2026 Annual Report, which was lodged with the ASX on 13th August 2026. The purpose of this item is to provide the opportunity for shareholders to ask questions and make comments about these reports, as well as the general business of the company. Shareholders will have the opportunity to ask questions of our auditor, KPMG, relating to the conduct of the audit and the auditor's report. All questions to the auditor should be addressed to me as chair, and if appropriate, I will ask our lead partners, Brendan Twining and Scott Guse, to address the meeting.
If your question relates to another item of business at today's meeting, please wait and ask your question when that item comes up. I now invite comments or questions on the financial statements and reports. I will start with questions we have received in advance on this item, which Kylie will now read out. Thanks, Kylie.
Thank you, Chair. We have received five questions on this item. The first two questions were asked by Ms. Carmel Carlson and Mrs. Christine Winter, and they asked why the Dividend Reinvestment Plan was suspended for the final dividend.
Thank you, Ms. Carlson and Mrs. Winter. As I made some comments in my opening address, because we had a large legal matter called Greensill in the process of being settled across the year-end, we had to make the decision to pay our dividend out in cash and not in shares via the DRP. There is a governance requirement on all companies that the board has to approve the DRP every six months, every time we issue the DRP, and we have to consider if there are any material matters that we can see in the marketplace or what we are doing that may cause any kind of material issue for shareholder, that shareholders may or may not be aware of. In this case, it was a big piece of litigation that was resolved successfully, but at the time, we decided to be prudent and suspend the DRP for this period.
But it will go back to normal for the next six-monthly period. Thanks, Kylie.
Chair, the next question is from Mr. David Hughes, who asks, "In a period of financial hardship for many Australians, why is IAG increasing premiums exceeding inflation?"
Yeah, thanks, Mr. Hughes. This is a very important question. We're very focused on ensuring that insurance is affordable for all Australians. We spend an enormous amount of time working with all the different government bodies to ensure that Australia is more resilient as a nation so that the impact of when large perils happen, the impact is less. On our own costs, while CPI is part of our driver, we have a lot of supply chain costs that are products that come from overseas to repair houses and to repair cars. The inflationary impacts in those items have been higher, and we've had higher peril costs over the last three to four years. That's been probably the key drivers of our increase in premiums. Nick, do you want to add anything to that?
No. We've got a challenge as a country where we sort of outlook on, say, property is probably risk on, isn't it? With climate change, increased expectations of frequency and severity events. Yes, we've got inflationary pressure, but in addition to that, unfortunately, we also expect actually there's going to be more natural perils, more challenges, more claims. The pricing of insurance, not just at IAG, but for our country, is really reflecting that.
Okay. Thanks, Nick.
Chair, the next question for this item is from shareholder Mr. Francesco Scorzelli, who asks, "Why are dividends so low in the last three years?"
Thanks, Mr. Scorzelli. Dividends over the last three years, they've increased every year. We pay out between 60%-80% of our profits. We obviously don't pay out all the profits because we have to retain some of the profits to ensure that we keep a capital base that allows us to continue the strength of the company, so that when disasters hit, we can pay out our claims. We paid out about 74% of the dividend this year, which was right in the middle of our guidance. I think that's about all I can add. Yep. Thanks, Kylie.
Chair, the final question submitted before the meeting for this item is from shareholder Mr. David Dodd, who asks, "Given audited financial statements form part of the governance of an entity, what consequence from IAG's perspective will flow from the shocking and unacceptable failures of governance displayed by KPMG in relation to audit duties?"
Thanks, Mr. Dodd. In relation to KPMG as a business, I have no intention of commenting on that. KPMG has been our auditor since we listed as a company. They have provided extremely good service in the last five years. Brendan, our current auditor, has provided excellent service to shareholders, ensuring the rigor and the integrity of all the reporting that we do into the market. That being said, they have been our auditor for quite a while, and a little while before this meeting, we announced that we would be going to tender to choose another auditor. That process will be in place. KPMG won't be included because they have been with us now since 2000. That process has commenced and will be finished sometime in 2027. Thank you, Paula.
No more online questions pre-submitted.
Great.
Now to the room.
Thanks, Paula. All right. Questions from the floor. Number two.
Good morning, Chair. I would like to introduce Mr. Joe Nagy, a shareholder.
Hi, Joe. How are you?
Good morning. Excuse me. I want to begin by acknowledging that you have a difficult job to do as Directors of a company, especially in these times. Even though many of you won't appreciate, I've got more than a page of questions as a result of your annual report. In my view, this is not a good report in terms of the information you've provided on this report. I hope if I keep asking these questions, that some of you will wake up to this fact and be more honest, and that is the key word, honest, with the shareholders here. I can accept the fact that sometimes things go right, you make mistakes. Back a long time ago, I'm not sure when you were there, we were at Caltex House.
I voted for increases in pays to executives and directors, so I'm not against any of that sort of stuff. Here's my first comment of questions of a page and a half, which I don't think I'm going to have a chance to ask all of.
No, Joe. We normally try and have a couple questions.
Even though profits have fallen, IAG's FY 2026 financial summary shows that directors and executive remuneration have benefited more than what shareholders have received in their dividends. Total comprehensive net income has fallen 33.7%. That is a big number, as all of you should know. Secondly, EPS, another big number. That has fallen from AUD 0.575 a share to AUD 0.334 a share. And dividends, well, that's not much. That's the lying ball, AUD 0.017 down. Here's the important thing. In spite of all that, how can you all up there look me in the eye and tell me that you deserve a 14.6% increase in your salaries. All of them. The executives have gone up 34.9%. Remember last year we had a bit of a discussion about what executives were going to receive. They've got a, [audio distortion] All disgraceful.
If you don't perform well, if the company doesn't perform well, you haven't got too much of a leg to stand on to ask for more money. I have more questions, but I'll just give you that touch of-
Okay. That's a fair few questions. I think I missed the second one, so I might ask. I'll group some of those together. On the director's pay, over probably the last, I would say six or seven years, the early years we had no increase in directors' pay, not even CPI. Only recently have we started to increase directors' pay by CPI. The increase in the actual amount of directors' fees, the big increase you're referring to, is because of activity within the company. We now have additional related entities or regulated entities within IAG that had to be established. APRA has required us to put external directors on those regulated boards and therefore, with that additional work comes a salary. They're all pretty quite reasonable salaries for the responsibilities of those regulated entities.
It's not the increase per se in the fee, it is the increase in the workload that the directors are doing because of the additional regulated entities. On executive pay, we spend quite a lot of time benchmarking our executives' pay to the market. We ensure that, one, we don't overpay our executives, but two, we ensure that they are paid appropriately with the market and how the market is structured for pay. If we don't do that, then we will lose the excellent talent that we have in the organization. On EPS going from AUD 0.575 to AUD 0.334, I don't know how to answer that question. Nick, do you want to-
Do I want me to.
You want to take that one?
Sure.
Yeah.
Yeah. Hi, Joe, and thanks for that question. The two main things between 2025 and 2026, if you look at the underlying performance of our business, year- on- year, actually, it was pretty strong. The two big variables from 2025 to 2026, actually in 2025, our perils were lower. That is the industry that we are in and the inherent volatility we have as a business that some years we have more, some years we have less natural perils. 2025 we had less, so that is quite material. Then secondly, there was a release of a large provision in 2025 that was a bit of a one-off. If I look through that, we are in the business of taking perils, I accept that. The underlying performance of the business in 2026 compared to 2025 was pretty strong. That is the reconciliation.
The only thing I would add to the EPS numbers is over the last five years, under Nick Hawkins' leadership, and the leadership of our senior leaders, the total shareholder return for IAG has been over 20%. The share price has gone from AUD 4 to almost AUD 8.70 yesterday. That is quite a significant improvement in performance. It is not just an EPS related question. Yeah.
I'll ask one more question. It's time to give others a chance.
Okay. Thanks, Joe.
One of the things I noticed here was that IAG purchased 27.3 million shares of its own shares for AUD 200 million. I want to know, and this may be difficult and maybe not answerable, but who was the seller?
Oh, it's a share buyback. Do you want to cover? Yeah.
Yeah. Thanks, Joe. I don't think we know. There's a whole raft of shareholders. No particular. So if the question was there was a particular shareholder that was selling into that buyback that was completed, no, I don't think so. I think it was across a whole range of shareholders.
Yeah.
And that capacity, that option of selling your shares through an on-market buyback was available to all shareholders.
Thanks, Joe. Next question from the floor. Number one. Yes?
Hello, Chair. I'd like to introduce Mr. Simone, a shareholder.
Hi, Mr. Simone. How are you today?
Good morning.
Good. Good to see you back.
Chair Pockett and fellow board members. The winning formula, simple. Every Tuesday, first Tuesday of every month for the last 12 months, a board has met. They have increased interest rates. A company then comes together, has its meeting, looks at what happened there, and then passes that on. Bingo. That is one thing. You have a suspended Dividend Reinvestment Plan, which you have outlined that it was because of a legal matter with Greensill. All of these can be explained easily on a spreadsheet, no problem, or a 100+ page annual report. How do you reflect that in terms of the 530,000+ retail shareholders and that social contract that you have with them, how they are struggling with those premium increases? A lot of them are policyholders. They have car insurance, house insurance. They would have felt the increases that you have passed on.
But that social contract, how do you express that this past financial year?
Great. Thank you, Mr. Simone, and thank you for asking a very clear and straightforward question. I appreciate that effort you've gone to. Nick, do you want to respond? Yeah.
Hi, Mr. Simone. There's moving parts to our company. I think behind that is the bigger question, which is the reason that we're seeing higher interest rates in Australia, unfortunately, is we continue to see higher inflation. That's across a whole raft of things that are driving costs up, and the response by our Reserve Bank has been to lift interest rates in response to that inflationary pressure. Unfortunately, we have many parts of our company that are subject to that inflationary pressure. In fact, we have parts of the company that are experiencing more than that, particularly in the building industry and the repair. As I mentioned before, you add in some of the frequency we expect around natural perils. That's another problem that we're managing with.
If I step back and said, on one hand, we've got inflationary pressure, which is impacting the cost of insurance in Australia. Actually, higher interest rates just on their own, we're trying to make a margin of around 15%. Actually, our margin gets a bit of relief because we have slightly higher interest rates on the money that we're investing on behalf of our policyholders. In a way, on one hand, that's a slight positive. The real issue I think that our country's got is what is driving the reason we're having interest rates? It's that inflationary pressure. What's that inflationary pressure doing to our country, and what do we do about that? The government's response is this. We are a recipient of that and some in the running of IAG. It's a complex problem. I'd also say we're doing everything we can.
We are not tone deaf to your point around affordability of insurance, household budgets being under pressure. We are doing everything we can to run our company as efficiently as we can, so we can manage the cost of insurance as best we can. We have a number of things in place also, where we have vulnerable and households under pressure, where we are trying to support those households in these pretty tough times that our country is experiencing right now. Yeah, it is a complex question, but I think there is a few parts to it that I think it is important that we think through.
I appreciate that, and also understand that when you meet, it is the feedback loop that you have individual board members, that communication that you have. Then you have the feedback loop where you discuss, you have your surveys with employees, the employee-to-employee performance feedback loop, and then you have the peer-to-peer feedback loop that is Insurance Australia Group with other insurers in Australia. But in terms of that, would you agree that kind of creates a corporate bubble? That corporate bubble, how do you reach beyond that? It is one thing to show case studies of a fire that has happened and the aftermath of that with your policyholders explaining how IAG has helped them, but it does not stop there. You can have a period before that, not you are reacting once an event happens.
In terms of a social contract beyond an event like a bushfire or a flood, what are you doing to involve a lot of the 530,000+ retail shareholders, which are policyholders, which are experiencing higher prices in their cars and on their tables and buying general grocery items. How are you bringing them in and busting that corporate bubble?
Thank you. I do not know if there is a corporate bubble. We also have a whole process around feedback from our customers, and that is on every interaction that we have with our customers, be it a phone call, be it a peril event, whatever it is. All that information is collated and presented to the board for a discussion, and the remuneration of our executive team is linked to the performance of our customers. So we are pretty focused on the customer feedback. You asked about social value. The social value is the protection that we provide to our customers. AUD 19.4 billion in claims and turning up when your house has burned down, et cetera, that is where our real social value is.
Thank you.
Thank you, Mr. Simone. Next question. Number two.
Chair, I would like to introduce Ms. Natasha Lee.
Good morning, Mr. Chair. Tom Pockett, good to see you again.
Morning, Natasha. How are you? Good to see you again.
Firstly, I would like to thank the Board and the IAG team for the results from last year. The first question is about AI and the AI journey the company is on. In particular, I understand that AI has been around for a while and you have applied generative AI to elements. I am particularly interested in the agentic AI, which you say your sales and service team is commerce ready. How is that actually being rolled out, the application of it? Have you applied it to goals or functions? Has it been an overlay of the organizational structure, or is it more goal orientated, which involves more of a shakeup of the company?
Okay, Nick.
Yeah, sure. Hi, Natasha.
Yep.
What we have done around this topic, which of course, we're learning this. It's not just an IAG topic, it's actually for all of us, isn't it? Around how does this impact our lives? We've had AI within our business for some time, particularly around some of our mathematical models that we have within our organization. It's not completely new to our company. In fact, maybe insurance was always an early adopter of this. I don't think we called it AI at the time, but the concept is what we've had. We've very much had it inside the company, originally in some of our models, in our technology teams. What I was talking through before was we are now using and engaging and operating agents inside the running of IAG.
The next step, which is your question around agentic commerce and capacity of customers to transact with IAG through some sort of agent of some form and to effectively buy insurance. At the moment you can't do that with us, but we're setting up I think that's where the world's going, not just on insurance, but on how we buy things as consumers, businesses. We are setting ourselves up to be able to operate like that. Obviously, what we need to be able to do is be able to connect a customer's, some sort of agent or buying capability into our company and the platforms and technology that exist within IAG very carefully. I sort of made the point that there's a human oversight of this topic at IAG. We're not going to have agents that we're not sure where they are and what they're doing.
We're clear on the governance of it. At the moment, it's all within the environment of our company. But we're no different than many of the other service providers and products that exist in the world. It feels like over the next short period, agentic commerce is coming, and we need to be able to set, with human oversight, appropriate governance, appropriate security, making sure that that's a safe environment for IAG and importantly, a safe environment for the customers that want to transact with us. But it's definitely an emerging topic.
Yes. No, I appreciate that, and I see it as an emerging, and it's something which every company has to get involved in. It's the actual application. I suppose the reason for my question is that from what I understand is that obviously you're looking at productivity gains from the application of AI, particularly agentic. If you just overlay on existing organizational functions, from what I understand is the productivity gains are somewhat more limited if it's more task orientated where you think about the wider application and then there's a potential for greater productivity gains. Of course, it has to be done in a responsible risk managed base. I appreciate that it will have human oversight, which is always important. I suppose flowing from that, there were some reports that some insurance companies were up in the questions asked of customers in assessing the risk.
There were factors which determine their premium based more on things like ethnicity and lifestyle, which I don't think is appropriate so much. I know that insurance companies can and do apply a postcode based risk to the various premiums. I just want an assurance from IAG that you do not and will not be applying those sorts of biases in determining premiums.
Definitely not. We actually have a range of processes to ensure that we don't put those discriminatory biases into the model. Obviously, where you live can have an impact. So in Melbourne, for example, there's a lot of car thefts. The insurance costs in Melbourne have gone up. But any discriminatory items, no, we don't allow them, and we have processes in place to make sure we don't accidentally put them in.
Okay. Yeah, no, that's fine. Just needed to add assurance. There was a report about in relation to NRMA Insurance underpaying some compulsory third-party benefits. From what I understand, it was relatively small. Has that impact been quantified? What's-
The third party-
How far are you along to resolving that?
I am not too sure what you mean by the third-party benefits.
There was-
Oh, CTP?
Yeah.
Yes.
Over to you.
Yes. Thanks, Natasha. Just to comment on ethics and I will come back. We were a founding member of an entity called the Gradient. We are very focused on unintended consequences of technology, call it that. One of the things we have done is we are partnering, in fact, we are a founding member of the Gradient Institute, which entire focus is making sure that we use technology and AI in particular with an ethical focus. We do not want to get caught out on that. We have a lot of rigor in our processes within our company with that lens, a specific lens sitting over the top so we just do not end up going down a path of doing something that we did not mean. That is very important.
In relation to the, sorry, your question on CTP, so the compulsory third party products that we have in New South Wales, we had some relatively modest issues that we have rectified, and the financial impact of that is very immaterial. Very modest.
Okay.
The customer impact has been remediated and changed straight away.
Mm. Okay. No, that's fine. I saw that it seemed to be fairly small, but I just wanted confirmation of that.
Very.
Yeah, there's previously questions about under-insurance, initial under-insurance, and I understand that there's cost of living pressures. When you get your premium notice, it sort of can be tempting to somewhat under-insurance. Is that becoming more of a problem? Do you quantify the degree to which under-insurance is occurring, and actually measure and plot that sort of phenomenon?
Yeah. As a country, this is a problem that we have because as a country, what we've done is we've built a lot of towns in places probably with hindsight that we shouldn't have, and we've built them in areas that are subject to large natural perils. So there's two things that are happening to your point, that the cost of insurance is becoming prohibitive in certain parts of Australia. So that sort of people are not affording it, or their people are under-insuring as a theme. It's not new, but cost and household budget pressure is not helping this already challenge that we have as a country. To be fair to government and various other people are heavily involved in trying to solutionize this. I would say the theme that we're seeing right now is a little bit, but not much.
We're not really seeing a material in the sort of year-on-year. If I was going to make a 20 or 30 year comment, yes, we've definitely seen more people drop out of insurance with some of the challenges I mentioned. On a year-on-year view, only a very modest change in the level of insurance of our country.
Thank you. No, thank you very much.
Thanks, Natasha. Any other questions on this item? There is a question up here. It might be a second.
Hi, good morning, everyone. It is a privilege for me to come and attend as a proxy for my husband who is actually attending another AGM. I really would like to congratulate the management and the Board of IAG for another year, another very good year delivering about AUD 1 billion profit after tax for the shareholders. On the other hand, I would like to also comment, a bit disappointed when I walk in and to see that there is not even a simple breakfast for the shareholders. I must say that I travel quite far to come to here and leaving my sick son to attend the AGM with an empty stomach. So I would like to recommend for the Board of Director to at least provide a very simple breakfast next year for the next AGM. Thank you very much.
Okay. Thank you for your comment and thank you for traveling all this way to the AGM. We appreciate it. Penny MacRae will take that on notice. Thank you . I think we are here. Have we got a few questions online, Colin? Colin? Oh, yeah. Yeah. We have got a question from Mr Stephen Mayne. Number two, sorry.
Yeah, I would like to reintroduce Mr. Nagy.
Thank you. In reading your annual report, I am not sure what the word was, but I was kind of horrified at page 92. A lot of my questions concern page 92 and the person that has committed an act. The other thing I would like to ask you about is why can't you tell us how much you are paying for insurance and why?
I would like to know what this person committed that caused them to be terminated, if I have read this correctly.
Sorry, Joe, do you mean the director's insurance on page 92? Is that-
Yes. Part of that has to do with that is right. Is he being compensated, this person who has been asked to leave or who has been fired, whatever the polite word for that is. Can you give us any details on that?
I-
I realize that could be sensitive, but if you put it in an annual report, there has got to be a reason for it being in the annual report.
Joe, I do not think there is any noise on that note. My understanding is relatively standard. There is no particular incident. I think if you are inferring has there been something with a director or former executive that has caused us to write particular words, there has not.
No.
That note from my perspective, it just would be in the ordinary course of the company. I do not think if you are inferring there is something that has happened there is some insurance issue with a former executive or former director, I am not aware of that.
That is right.
I am not aware of that at all.
No, there has not been any. This is-
Why did you make that comment in the first place then?
Can we take that? Because I think that we think that's sort of standard words. If that seems a bit unusual, then we can probably have a look at that for next year.
I'd like to use a rude word like baloney, but I won't use it. That doesn't make sense. If it's not needed, it's not relevant, why put it in there?
It does.
Joe, I think, might take it offline. Grab me after the meeting because I am not too sure we are looking at the same note. Grab me after the meeting, and I will take you through it. Yep.
Turning those wheels better.
Another question. Oh, number four. Yep.
Chair, I would like to introduce Annie Selman.
Thank you. Mr. Chair, in your address, I think you mentioned taxing positions on insurance holders. I am not sure whether I heard that correctly, but if-
Yeah.
I did, could you explain a little bit more about that or-
Yeah.
-direct me to someone afterward I could get some information on that, please?
Yeah. I was referring to the Emergency Services Levy paid by New South Wales residents that take out insurance. We have been pushing the New South Wales government extremely hard to remove that because that would reduce the cost of insurance straight away. Insurers also pay GST on that. So it is not only Emergency Services Levy, it is another GST. We would like to see that removed as a cost. Yeah. Thank you. Okay. Any other questions? No, I do not think so. We have one online.
Would you like me to read the questions online?
Yes. Thank you, Kylie.
Thank you. We have had a couple of questions come in since the meeting opened. The first is from Mr. Stephen Mayne. I will read it so shareholders can hear. He says, "Given that we have progressively seen the various mutually owned RAC, that would be the Royal Automobile Clubs, organizations across Australia exit their insurance operations. It arguably does not make sense for RACV, that is in Victoria, to hang in with its 30% stake in IMA over the longer term. Since that joint venture was first negotiated when Nick Whitlam was Chair of the then mutually owned NRMA more than 25 years ago, have there been any material changes to the terms of the agreement?
Are there any things that we would like to do but cannot do courtesy of having RACV as a 30% joint venture partner across Victoria and New South Wales?" And finally, "Have we ever tried to buy them out?"
Thanks, Stephen. We haven't ever. I can't remember. Not in my time on the board have we tried to buy them out. We've got a very successful joint venture with RACV, which is the NRMA version in Victoria, and there's no desire for us to change the arrangements. It works exceptionally well. Thanks, Stephen. Next question.
Thank you, Chair. The second question online is from Mrs. Louise Memmolo. She asks, "How has the workforce numbers across IAG been impacted as a consequence of AI processes?"
They haven't been specifically impacted. AI is a very new tool. All technology change bring about changes in workforce and different skills required in the organization. The fundamental for IAG is we are a people company, and we will always need people to run IAG because our interface is with people, and that's our customers. Sure, AI will make probably significant improvements in the efficiency and the way we can service customers. But we will remain a people company. Thanks, Kylie.
Thank you, Chair. Our third question on this item also comes from Mrs. Memmolo. She asks, "In the financial year, has the Australian workforce increased or decreased? What is the forward-looking trend?"
The Australian workforce in IAG, I assume. Nick? You are going to. Yep.
It has been relatively flat.
Stable. Yeah.
Year- on- year. The workforce of IAG.
Oh, the workforce was relatively flat in terms of numbers.
Is my mic off? Is that better? Sorry.
Yeah.
Yeah, the workforce, Tom said, relatively flat year-on-year.
No further questions, Kylie?
Thank you, Chair. There are no further questions online or on the phone for this item.
Great. Thank you. Oh. Missed one.
Chair, I do have a question.
Yes
From Mr. Ron Strauss. It is a shareholder.
Mr. Ron Strauss. Yeah.
Thank you, Chair. We have just heard how IAG is a people company, and loyalty has been a major thing that has been promoted, particularly within the NRMA section, and loyalty is a big thing. I am not happy the way that people who had policies with CGU for half a century just got migrated to NRMA. No real discussion. This is the way you are going to go. You are going to say, there is no difference, but I am going to say, there is a difference because some people drive a Lexus, some people drive a Toyota. We all know they are both great brands, and they are going to get you to your destination. My question is, why it is so impersonal the way these people were just moved over to the NRMA group?
The other thing that I want to raise is, in one case, somebody who has had a policy for over 50 years after being moved to NRMA was told that, "No, sorry, we do not insure that type of property anymore." So where is the loyalty part of the brand? I think looking after people who have been with the company for half a century is one of the most important drivers for success. So I would like to see what you have to say. Thank you, sir.
Thank you. On the latter one, I cannot help with that because I would need to understand the circumstances surrounding that particular policyholder. Nick, do you want to talk about the CGU transfer?
Sure. Thanks, Ron, for raising that. At a company level, as part of trying to simplify, we have made some modest changes in some of our portfolios where the company thought it made sense. Our intention was not to impact a customer the way you have described, and for any customer to have a poorer experience, and a customer that is also our shareholders. From our point of view, that was not the intent, obviously. The change was well-intentioned. It sounds like for you and your experience, that has not been great. Can I suggest that we look at your particular circumstances? Julie and Jarrod, the head of NRMA and CGU, are right in front of you. I think between the three of us, we try and resolve that.
Once again, that was not our intent. I apologize that your experience does not sound great, and that was not what we wanted. We will sort that.
Okay. Madam Chair?
Chair, I have a question from Mr. Chris Fieldhouse. He is a shareholder.
Yeah. Thank you, Mr. Chair. This is the first time I have been to one of your meetings. I walked in the door, and I was quite surprised at the number of people on the board. I wonder why there is so many of you, and it must be a great lunch when you get together.
Well, on the last one, we only have very simple lunches, sandwiches and salads, so it is not too exciting. In terms of numbers, we do have a large board. We have been talking about that at the board. About three or four years ago, we decided to increase the insurance skills and depth that we had on the board, and we brought on some new members, which is why the number increased slightly. Over the next five years, there is a very good succession plan for directors, and the board going forward, if it so desires, can reduce the number of people actually on the board. So we are definitely looking at that going forward. So it is a very good question. Thank you. I think that is all the questions.
That is it, then.
Okay. Thank you for your comments and questions in relation to. Joe, you want another one?
Yes.
Oh, sorry. I might have to make this one the last one, Joe.
The last of the day.
Okay. Thank you.
Do not want to bite it too much. What are Credit Suisse and White Oak claims against IAL? Sorry, I was going to say IAG. And why IAL? Why not IAG?
Yep. Nick.
Thanks, Joe. We sort of roll this up to this thing called Greensill, which has been a significant piece of litigation that has been going on for some time. The reason it is IAL, not IAG; IAG is our parent company where investors come into. IAL is sort of the insurance license in Australia, so that is why. But if you read IAL, it is effectively IAG from a shareholder's point of view. That has been subject, and Tom mentioned it in sort of why we suspended the dividend. That has been a big piece of litigation, which we have been defending our position. So there has been a large claim against our company. That in the vast majority of it, but the Credit Suisse element of it has now been settled. That is gone. It did not go to court.
The last piece of that right now is in court, which is with White Oak, and we are hoping to have a pathway through that shortly that is positive for IAG. So essentially, the topic is going to be over.
Okay. Last question.
But it's been a six-year process.
Quickly. Why is IAG relying on an external manager who's previously managed these funds to value them again? What's he going to say? The same thing he said before. You haven't got really, what's the word? Unfair, unbiased opinion. He's looking at it himself again.
Joe, I'm not too sure what you're referring to. What valuation of funds?
It's on page 148. "Relying on external manager who previously managed these funds to value them again."
Joe, can I make a comment?
Yeah.
I think, are you referring to Credit Suisse and?
Yeah.
The matters are not related. On one hand, Credit Suisse was in relation to an insurance policies that we wrote within our normal business, a long, long time ago that came up, and Credit Suisse had a group of investors. It was not IAG investing in Credit Suisse. Nothing to do with it. In fact, Credit Suisse was making a claim against us on behalf of investors in one of their funds. Nothing to do with how IAG invests its money. This comment here is on page 148. That is the summary of the investment portfolio. We manage some of our money internally, but much of our money is also managed externally, not dissimilar to how all of us manage our superannuation money. We rely on some expertise of outside experts to help manage our money.
As part of that process, sometimes we are utilizing their capability and valuations. But the first question around Greensill, Credit Suisse is unrelated to the commentary there.
Yeah.
Last question, then I will shut up. This is a question that always got me when I was doing credit at Citibank. Why did IAG remove KPMG as an external auditor after 26 years? I would also like to hear your answer, as well as KPMG if they are in this room.
I think that is a question for me and not for KPMG. They have been our auditor for 26 years. As I said, they have been particularly good. However, since listing in 2000, the board thought it was appropriate that we should go to tender and test the market, and look at other alternatives for our auditor, and I think it is a healthy thing to do. Thanks, Joe. Okay. I think we are done. No, maybe not. One more.
Chair, I have Annabel Fieldhouse to ask a question. Thank you.
Great.
Good morning.
Thanks, Annabel.
Thank you, Chair. I am a little confused about the whole Credit Suisse, Greensill. It has sort of been in the media, and how did IAG get involved in all of this, and also with the litigation and in the courts and so on? How is that impacting on our company?
Well, at the end of the day, the net position and the net exposure has not impacted IAG in any material way. That is the first thing. Shareholders can relax easy. That is why we spent so much time in removing this. How it came about was a long history, which I do not think I will go through because it is probably quite boring for shareholders, but we sold a company. That company did the wrong things with a lot of people, therefore, there were a lot of people involved in the litigation. But the key thing is, successfully resolved and minimal financial impact on us, immaterial. Which is good. Okay. I think we are good. Okay. Right. Thank you for your comments and questions in relation to the financial statements and reports. The next two items of business deal with the re-election of Simon Allen and Wendy Thorpe.
While separate resolutions will be put for each Director's re-election, we will hear from Simon and Wendy one after another before we take any questions in relation to their re-election. The Board, with the relevant Director abstaining, recommends that you vote in favor of each of these resolutions. First, we will hear from Simon.
Thank you, Chair. Good morning, ladies and gentlemen. It is an honor to be sitting before you again today for re-election to the board of IAG. I joined the IAG board in November 2019 and currently serve as a member of two board subcommittees, the People and Remuneration Committee and the Risk Committee. I have also been very involved in IAG's New Zealand subsidiary, IAG New Zealand, having been chair since 2019, providing direct governance of our New Zealand operations. My prior experience is over 40 years commercial experience in both the New Zealand and Australian markets. Many of my roles during that time have been inaugural or startups, calling on me to bring both strategic and governance acumen to bear in founding and growing organizations. This included founding the investment bank of Barclays in New Zealand called BZW, which later became ABN AMRO.
I was Chief Executive of those two entities for 21 years. My past roles have included corporate, government, and charitable governance and advisory roles, including being the inaugural chair of the New Zealand Stock Exchange and the Financial Markets Authority of New Zealand. I believe my extensive financial services and governance expertise, along with my appreciation for the duties of listed directors and my deep general insurance and other experience in both Australia and New Zealand enable me to contribute significantly to the IAG board. I am also a Director of Ampol Australia. I have the time and the commitment to be able to do this. If I am elected, I will be fully committed to working to create sustainable long-term value for you, our shareholders. Thank you in anticipation of your support.
Thank you, Simon. We will now hear from Wendy.
Thank you, Chair, and good morning, ladies and gentlemen. I welcome the opportunity to share a summary of my background and experience with you today as I stand for re-election to the board. I joined the board of IAG in July 2023 and was appointed Chair of the People and Remuneration Committee in September 2024, and Deputy Chair of the Nominations Committee in April 2025. I am also a member of the Audit Committee. In September 2025, I was appointed to the board of RACQ Insurance when it became a subsidiary of IAG.
My executive career spanned over 30 years, centered in financial services and with a strong focus on insurance, funds management, wealth management, and banking. The roles that I held included Chief Information Officer and Chief Operations Officer for AXA in Australia, one of the world's largest insurance companies, and as Group Executive Operations at AMP after the AXA Australian and New Zealand businesses were sold to AMP in 2011. My experience in leading technology and operations at scale has enabled me to add insights on technology deployment and discipline to board discussions, notwithstanding a rapidly changing world. For the past 10 years, I have been engaged solely in governance roles as a Chair and Non-Executive Director.
In addition to my roles at IAG, I am currently chair of Epworth HealthCare, Victoria's largest not-for-profit private hospital group, and chair of Online Education Services, which partners with universities to provide undergraduate and postgraduate courses. I am also a Non-Executive Director of People First Bank, Australia's largest mutual bank, and a Non-Executive Director of Warakirri Asset Management and Rest Agriculture. Formerly, I was a non-executive director of Tower, a listed New Zealand-based general insurer, and chaired the Tower Risk Committee for the latter part of my tenure. I am also a former non-executive director of AMP Bank. I have appreciated the opportunity to learn from sectors outside of financial services, as my roles as a non-executive director in other companies in the health, education, and energy sectors have offered fresh thinking on key topics.
I am a graduate member of the Australian Institute of Company Directors, a fellow of both FINSIA and FCISI, and a member of Chief Executive Women. In 2025, I was honored to be awarded a Medal of the Order of Australia for services to the finance sector. Throughout my time as a director of IAG, I have been continually impressed by the balanced consideration given to shareholder expectations, customer experience, employees, and sustainability in all its forms. The pride in being the company that is the first into disaster situations to support customers and the last to leave is very meaningful to me. With the reality of climate change upon us, I appreciate IAG's work in understanding patterns, predicting change, and then sharing this insight with key stakeholders to assist in planning and decision making by government, across the industry, and in local communities.
I live in a semi-rural community just outside of Melbourne and see firsthand the vital role played by the insurance sector in assisting to educate the community and providing much needed support at the time of a major event. I believe that my deep financial services experience, both as a director and executive, my domain expertise in technology operations and finance across sectors and in the community, enables me to make a valuable contribution to the board of IAG. Accordingly, I seek your support for my reelection. Thank you very much.
Thank you very much, Wendy and Simon. Since we're I don't think there's any questions online. There were no advanced resolutions. I'll move to any questions in the room in relation to the elections. Yes, number two.
Chair, I would like to reintroduce Ms. Natasha Lee.
Natasha.
Thank you, Mr. Chair. I don't have any problem with Simon, maybe, and Wendy. I've known them for a number of years. I just want to make the point which I've made previously that a company such as IAG, the board should better reflect the community in general, not just look at gender. I ask that you be mindful of that as you are considering a new director coming up.
Yeah. We will. Thanks, Natasha. It's a valid point. Yeah. Number one. Yeah.
Hello, Chair. I would like to reintroduce Mr. Simone, a shareholder.
Okay. Thank you.
Good morning again.
Morning
Chair and board. There is an opening on the nomination committee in March of next year. As a side note, how tough the character of general Australians, how generally, and you have got all your smartphone, 75% of Australians diagnosed with a terminal illness live beyond the date that they were told they were going to die. None of these people live next door or have regular coffee with an office holder who says you can have the highest award for the nation of Australia. None of them are. Their award is living. That is a character. We are tough buggers. Then you have got the CGU policyholder, now NRMA, and I am assuming based on the comments, the board thanks you for your social value, but not your social contract.
As long as you renew your policy, if you get your car burgled or your house burgled or your house burnt down, you might appear as a case study at the next AGM. But in general, you are looking for another member of the nomination committee. Why not the former CGU, now NRMA grassroots policyholder? Any of those who are living beyond their terminal illness in Australia. The grassroots experience, do their lived experience, their issues of the policies that you enable them to buy and have, does it just cut off at they get their policy, they pay their policy, they get their shares, they buy or sell their shares, that is it, thank you very much? Or is it, how else can you reward valued customer experience on a day-to-day value, a day-to-day general meeting way?
Okay. Thank you.
Why not?
Okay. Thank you, Mr. Simone. On who we appoint to the board, directors need a large amount of commercial experience and a length of time holding quite significant roles. The legal responsibilities associated with being on a board are quite significant, therefore, you need people that can operate not only in that role, but also bring their guidance and experience to the board. Just on how we interact with social groups and policyholders on another level, I will just ask Nick to talk about our advocacy groups.
Yeah, thanks, Mr. Simone. Part of that was the previous discussion we were having, too. We want to make sure, as a company, we represent and understand Australia and New Zealand and all the things that are in the communities. Actually, we want to be that. Firstly, we have 12,000, 13,000 people. They live in the communities of our countries, and so we have that insight. What we do have, we've got some more structure as well. We have loads of customer feedback, as you'd expect. We have a consumer advisory board, which is made up of many of the large consumer groups that we sit and we participate and we meet with them on a regular basis to make sure that we're not sitting in one version of what's happening in the world, and there's another version that we're missing.
We don't want that to be the case. As a shareholder, you don't want your management teams and your company not aware. We want to make sure we're in it. We've got two of our customer advocates who are sitting in the room right now, and their particular job is to ensure that the voice of customer is heard in our company, and that a customer doesn't feel like they've had the right experience and the things we're doing are not rectifying it. There's another pathway. The points you raise are very good ones. In fact, I'm doing everything we can as a company, the board, the management team, as you would want, to ensure that we really do are part of that, and that we're not lost somehow. I think your points are very valid.
Just to finish that off, quite a few of the board members have attended those advocacy group meetings to get first-hand experience. Thank you.
It's a kind of on-paper spreadsheet experience.
No.
We have a value of a number. If we are not in that loop, as Mr. Allen, he has got overlapping director roles. He is in that feedback loop. If you are not in that feedback loop, we are just on the spreadsheet. As Nick Hawkins pointed out, you have lost policies. A lot of policyholders have not renewed. Will the board implement, say, a formal scorecard type of metric where you have direct consumer affordability outcomes, your day-to-day what can we afford today type talk that generally everyone here talks about, versus protecting your retail base? Is it just about protecting corporate margins?
I think we have probably dealt with all those questions. Thank you. Okay. Any other questions online?
Questions online or on the phone.
Great. Any other further questions? It does not look like it. Right. The director votes and proxies received in respect of these resolutions ahead of the meeting are now shown on the slide on the screen. The results are strongly in favor of the re-election of Simon Allen and Wendy Thorpe. Please congratulate Simon Allen and Wendy Thorpe. Thank you very much. Resolution Three is the adoption of the company's remuneration report for the financial year ended 30 June 2026. The 2026 remuneration report is set out on pages 93 - 119 of IAG's 2026 Annual Report and provides disclosures relating to director and executive remuneration. Before I invite questions on this item, I will make some introductory remarks. There were no changes in IAG's remuneration framework in FY 2026.
In terms of FY 2026 remuneration outcomes, for short-term incentives, the group balanced scorecard, which includes both financial and non-financial elements, resulted in a score of 3.75 out of five. This resulted in the board approving an FY 2026 executive STI pool at 79% of the maximum opportunity. For long-term incentives, the FY 2023 LTI awards with return on equity and total shareholder return performance measures were assessed at the year-end of their four-year performance period on 30 June 2026. The FY 2023 ROE and TSR performance hurdles were fully met, resulting in a vesting outcome of 100%. Also during FY 2026, IAG completed the group's first independent triennial effectiveness review of the remuneration framework, introduced in FY 2024, as required by APRA's CPS 511. The framework was assessed as effective. The board regularly reviews executive remuneration so that IAG can continue to attract and retain high-quality talent and drive performance.
The FY 2026 annual review of executive remuneration for FY 2027 resulted in a fixed pay increase of 4% for the CEO and an average fixed pay increase of 4.7% for other executives. There have been no material changes made to the executive remuneration framework for FY 2027. I now invite questions on Resolution Three, the adoption of the remuneration report. I will start with questions received in advance. Kylie?
Yes, Chair. We did receive one question in advance. The question from Mrs. Penelope Townsend, who asks, "Is it appropriate for Mr. Hawkins to be allocated such a high salary when others are struggling?"
Yes. I might have touched on this before. It is important with all our executives that we have commercial salaries and commercial salary structures that are commensurate with the market. We have that, and we have retained and attracted some very good talent into IAG. With a TSR over 20%, Nick and the team have done a particularly good job. Thank you. Number two.
Chair, I would like to reintroduce Ms. Natasha Lee, shareholder.
Hello.
Thank you, Tom. I just wanted to make a point that the long-term incentive for the return on equity, it is set at 10% - 14%. Looking at the reports, that target seemed to have been relatively easily met over the last few years since 2022. I just felt that there probably was not enough stretch in that measure, even though I see from the proxies and everything that there is overwhelming support. It is not that I am against it is just that I think for that sort of measure, there probably needs to be a slightly higher hurdle.
I do not know if the executives would agree with you, Natasha. We have a three to five-year strategy, and these achievements in any particular year, which are set into the scorecard, are set to achieve that long-term strategy, and we do mark them pretty hard on those. I think where we landed was quite a reasonable event. Some of them we did not meet, and obviously we marked the team down for those. I will take your point and make sure they are hard next year.
Thank you very much.
Thanks, Natasha. Number one. Yep.
Hello, Chair. I would like to reintroduce Mr. Simone.
Morning again. I have waffled on about economic hard times, but we get on with it, and we see executive pay. Why are we not seeing executive pay being tied in with the same economic reality that we all face here? Could you at least look at introducing or committing to a hard cap or a multiplier linked to the median wage growth of an employee versus what you pay out in remuneration? Or even better, if you can disclose in next year's annual report the ratio between your average IAG employee pay and the CEO pay so we can actually get a measure, shareholders can get a measure of what is going on. Thank you.
On your first point, I am pretty sure, Nick, that we paid our employees about the same increase. It was 4.7% across the board was the average increase, so everybody got the same increase. On that measure, I do not know what that second measure would actually prove except the executives get paid more for their skills and experience. Thank you. Okay, I think that is it. Yeah.
Chair, we have had one question come in online during the meeting.
Okay.
It is from Mr. Stephen Mayne. It is some comments and questions. He says, "Well done for disclosing the proxy votes to the ASX along with the formal addresses, and well done for achieving more than 95% on all five resolutions. Thanks again for running a best practice hybrid AGM. Chair, you just need to follow what you do at Stockland and reveal the headcount data in the poll results, and you will have run a perfect AGM." "Our share registry provider, Computershare, does this at its own AGM and has the data. So how about it? Sure, it might show a majority of voting retail shareholders voting against this rem report item, but if that is what we have done, it is a fact, and it should be disclosed."
Thank you, Stephen, and thank you for the compliments. We will take that on board, opinion. If we are doing it at Stockland, we might do it here as well just to ensure it is consistent, even though I am no longer the chair of Stockland as of Monday. Thank you.
Chair, there are no further questions online or on the phone.
No further questions. I think that concludes the discussion on Resolution Three. The director votes and proxies received for this resolution ahead of the meeting are now shown on the screen. Based on these results, I am pleased to see the support we have received for our 2026 Remuneration Report. Resolution Four seeks approval for the allocation of deferred award rights and executive performance rights to the Managing Director and Chief Executive Officer, Nick Hawkins, under our short-term and long-term incentive plans. There is a detailed explanation of these allocations in the notice of meeting and remuneration report. As there were no questions in advance, I think that's still the same, I will move to questions on the floor for this item. Number one.
Hello, Chair. I'd like to reintroduce Mr. Simone, shareholder.
Mr. Simone, please don't ask the same questions.
Morning again. Free market and skin in the game. So if you can prove if Mr. Hawkins has got skin in the game, can you put in a mandatory post-vesting holding lock requiring the CEO to hold the shares for at least two years after they vest?
Yeah. I think we already have that in place with the APRA requirements. Yep. Okay. Any other questions? No, there are no further questions. No questions online.
Chair, there are no further questions online or on the phone.
That concludes the discussion on Resolution Four. The director votes and proxies received for this resolution ahead of the meeting are now shown on the screen. Based on these results, I am pleased to see the support we have received for the allocation of rights to Nick Hawkins. Resolution Five seeks approval to renew the proportional takeover provisions set out in Article Six of IAG's constitution for a further three years. Article Six of the company's constitution prohibits the transfer of shares under a proportional takeover bid, unless a proportional takeover bid resolution is passed by shareholders in a general meeting approving the offer. Under the Corporations Act and Article Six of IAG's constitution, these provisions must be renewed every three years, or they cease to have effect. They were last renewed by shareholders at our 2023 AGM. If renewed today, they will operate for a further three years.
Without these provisions, control of IAG could pass without all shareholders having had a chance to sell all their shares to the bidder. Shareholders therefore may be exposed to the risk of being left as a minority in the company and, secondly, a bidder taking control of the company without paying an adequate premium for gaining control. I appreciate this is quite a technical legal process to explain, and there is more detailed information in the notice of meeting. Renewing these existing provisions in IAG's constitution protects shareholders. Are there any questions in advance?
No questions in advance.
Are there any questions from the floor? Okay, no other questions. Oh, there is one. Yeah.
Hello, Chair. I would like to reintroduce Mr. Simone.
Mr. Simone, we are talking about this topic of business, and I assume your question will relate to this topic of business.
So shareholder contract is off the table, but about shareholder value. If there is a bid, an offer made that increases our shareholder value above its trading price, whether it be current or not at the time of when it is actually made, will we have a right to decide without board interference? Can you commit that a proportional takeover or a proportional bid? If it ever arises, there will be an independent expert report commissioned by the board but funded transparently, and then provided to shareholders in advance, and then have that expert who has created the expert report do what you do early in the year with the investor briefing? Have that expert brief about any proportional offer or potential bid.
Okay. There is a whole process involved in a listed company takeover, which includes many of the processes that you talked about, including independent valuation, et cetera. All shareholders will be fully informed and notified because the shareholders are the ones that have to vote. Thank you. Okay, I assume there are no more questions online. Okay, that concludes the discussion on Resolutions Five. The director votes and proxies received for this resolution are now shown on the screen. Based on these results, I am pleased to see the support we have received for these takeover provisions. That now brings us to the end of the formal items of business. I would like to remind shareholders who have not yet cast their votes on any resolutions to do so now, as the poll is about to close. We will now Yep.
Can someone help the lady up the back here from Thank you. We will now pause for a minute while shareholders in the room and online cast their votes. Yeah. There is another one. Hang on.
Mr. Nagy had another question.
Oh, sorry. Sorry, Joe.
Thanks, Chair. Mr. Nagy had another question. Thank you.
Yep.
I may be wrong here, but I think we've never had to sign this form before or put our name down. It was anonymous. Am I right or wrong? And why is it necessary now?
No, I think you always had to sign the form. Yeah, it's your legal document, so you have-
It is a legal document?
Yeah. It is a vote, so you need to sign that. Yep.
Okay.
Thanks, Joe.
Sign it. It just says name. It does not say sign.
Okay. We have another one. Gentleman up here in the middle. I think we've, has everyone passed their cards in? Oh, there's one more. Please wave the card if you haven't put it in yet. No, I think we're all okay. Thank you very much everyone for voting. The voting has been completed, I declare the poll closed. The final voting results will be released on the ASX today and will be placed on IAG's website along with the webcast of today's meeting. On behalf of your board of directors, thank you to everyone who attended in person today and to those who joined us online and by phone. I now declare this meeting closed. For those in the room today, the board looks forward to joining you for some light refreshments in the Smith Room, which is located to the left of the main foyer.
Thank you all very much.