IAG this morning announced a major restructure of its Australian businesses, cutting its operating divisions from three to two and setting up a new internet-based business. It has also lost a senior divisional CEO in the revamp.

The changes, announced by COO Mike Wilkins, will see the CGU and Business Partnerships divisions combined to form Intermediated Insurance, which will include all Australian business sold through intermediary channels. This division will be headed by CGU CEO Duncan West.

IAG spokesman Chris Jackson told insuranceNEWS.com.au all Intermediated Business products will be sold under the CGU brand. The only exception will be niche motor dealerships insurer Swann Insurance.

Mr Wilkins says the restructure will sort out channel conflict issues and "create end-to-end businesses with autonomy to manage their own brands, customer bases and markets".

The Personal Lines division has been renamed Direct Insurance and will combine the NRMA Insurance, SGIO, SGIC and RACV Insurance brands.

The present CEO of Direct Insurance, David Issa, has resigned to "pursue other opportunities", Mr Wilkins said. "David will continue to work closely with me and his leadership team while a new CEO is secured."

IAG will also set up a separate internet-based start-up business "to explore new business models that account for changing demographics and customer preferences," Mr Wilkins said. This will be headed by former Business Partnerships CEO Jacki Johnson.

More details and commentary in Monday's bulletin of insuranceNEWS.com.au.