All existing Lumley customers are set to be migrated to CGU policies from next year but the Lumley brand will continue to exist.
CGU is to become IAG’s primary intermediated insurer, while the Lumley name will be repositioned as an umbrella brand for IAG’s underwriting agencies. The process is effective immediately.
IAG Commercial Insurance Chief Executive Peter Harmer this morning announced more detail on how IAG would integrate the former Wesfarmers underwriting businesses it purchased for almost $1.9 billion earlier this year.
IAG has already comprehensively restructured its operations to accommodate the purchase, with its new commercial executive team announced in August.
Further leadership announcements, including state managers, are expected in early December.
Rural specialist WFI, also purchased as part of the deal, is set to continue in its current form.
Using input from brokers, CGU and Lumley policies will be combined to create a new set of CGU products, which will be introduced from April 2015. From that point, Lumley businesses will be migrated to the CGU products on renewal.
“There will be no derogation of cover during this transition, nor will there be re-underwriting of business as we move it across to CGU,” Harmer says.
“Customers will have at least the same level of cover as a minimum as they move to our new products.
“There will be no impact on claims, and our existing policies will continue to be fully serviced and supported during this time.”
Harmer says Lumley has added some excellent expertise to CGU.
“For example, the motor fleet and mobile plant teams are stand-outs but we’ve also found there are a lot of shared values in the company cultures,” he says.
At the time of the acquisition, IAG was Australia’s largest insurer and Wesfarmers was the fifth-largest, and Harmer says CGU will use its bolstered size to increase its risk appetite to offer more comprehensive coverage and enter more market segments.
CGU would not be using its size to unfairly disadvantage competitors though, he says.
“Rational, predictable and dependable pricing is incredibly important.”
Most Lumley and CGU offices will be physically moved together by the beginning of next year, although there are as yet no figures around how many positions might be cut.
“There will be fewer jobs but we’ll be able to mitigate the effect of that through natural attrition,” Harmer says.