Until Peter Harmer took the reins at IAG late in 2015, the entities that made up Australia’s largest insurance group existed in a series of independent silos, each of which carried its own systems and cultures.

It was a reflection of the way IAG had been built. It was formed in the 1980s by the NSW-based National Roads and Motorists’ Association (NRMA), which had a highly profitable insurance arm and an ambitious (and fractious) board of directors.

In 1998 the NRMA bought state-owned insurance operations in WA and SA, and the next year formed a joint venture with Victoria’s RACV Insurance, giving the formerly NSW-based organisation a substantial insurance footprint.

In 2000 the NRMA demutualised, with the road services and insurance branches being separated. The insurance expansion continued, with New Zealand’s dominant State Insurance acquired in 2001.

The following year NRMA Insurance became Insurance Australia Group (now simply IAG), and in 2003 it scored a coup by acquiring one of Australia’s largest commercial insurers, Melbourne-based CGU. A host of other acquisitions have followed, most notably NZI and the insurance operations of Wesfarmers.

When Mr Harmer took over leadership of Australia’s largest and most profitable insurance group in 2015 from Mike Wilkins, he knew things would have to change.

Mr Wilkins had taken an underperforming group of businesses, built mainly on acquisitions and given it a solid grounding for profitability. Mr Harmer’s challenge is to unite the IAG businesses and people behind a customer-centric culture focused on flexibility and efficiency.

He was one of the first local insurance leaders to warn of implications for the industry from the coming technological storm, where product innovation, flexibility and a deeper understanding of the market will replace outdated but tried and true methods.

The management structure he adopted was notably flat, with CEOs for each unit reporting directly to him.

It put a lot on his shoulders, but it gave him time to refine his strategy and his team.

In the past couple of years some senior people have left, and some extraordinary talent has been added, particularly in the innovation and support areas. The formation of a single division for the Australian businesses is a logical progression.

New CEO Australia Division Mark Milliner is one of Australia’s most experienced insurance executives, whose 21 years at Suncorp gave him an exceptional grounding in all things insurance, as well as the development of brands and – as Suncorp was built substantially on mergers and acquisitions – how to bring businesses together.

Suncorp’s success was built on a strategy of “one business, many brands”, and the Brisbane-based insurer was successful in bringing its support structures together to service the brands.

The problem with single entities within a group adopting their own methods and systems – and IAG reputedly has dozens of different systems that do essentially the same tasks – is that it’s a real obstacle to adopting fewer efficient systems for use across the division.

IAG has been tackling the problem for about two years, and it can be expected to accelerate under the new management structure, which encompasses the Australian Consumer and Australian Business units, as well as the Operations and Satellite units.

The insurer says the new division “centralises accountability for the customer, product, distribution and operations functions for IAG’s Australian brands”.

One sign of that move towards a more agile and efficient structure came immediately after news of the formation of the Australia Division, when IAG announced it has received Federal Court approval to consolidate its nine insurance licences into two.

Insurance Australia Limited (IAL) will become the insurer of all policies issued by CGU, Swann Insurance, WFI Insurance, IAG Re, Mutual Community, CGU-VACC Insurance and HBF.

The other licence is held by Melbourne-based Insurance Manufacturers of Australia (IMA), which is owned 70% by IAG and 30% by RACV. It will continue to provide policies for NRMA Insurance and RACV Insurance.

IAG has already come a long way in its program to build a 21st-century company where the greater use of data and more flexible products and approaches will happen across the business, moving it closer to Mr Harmer’s vision of a customer-centric company.

And Mr Milliner has had around 15 months as COO to understand the scale of the challenges involved in bringing the Australia Division into a single, cohesive unit. We should expect plenty of change to happen, much of it behind the scenes.

Technology will become even more of a focus in the George Street headquarters, and although IAG is coy on the subject, new efficiencies will inevitably result in headcount reductions.

It’s notable that the IAG Satellite unit, formed last year to be a “growth engine” by acting as a change agent, testing new ideas and “thinking customer and digital first”, has also been placed under Mr Milliner’s oversight.

A rapidly changing consumer landscape in which technology is dominant means IAG and the development of its new Australia Division will be watched closely by competitors and the market in general.