IAG CEO Mike Wilkins has promised brokers a more streamlined service from the group’s intermediated CGU business.

He told the Steadfast Convention on the Gold Coast today that CGU is creating a principal point of contact across all its products, with a business development manager for brokers.

“Direct relationships with our underwriting, claims and product specialists will continue to be encouraged to ensure intermediaries have the best of both worlds,” he said.

Mr Wilkins unveiled changes to CGU’s operational structure, noting that brokers had reported they found CGU difficult to navigate.

He says the business development teams will be focused on distribution channels rather than products or customer segments, “which we believe makes sense for an intermediated insurer looking to build a competitive advantage around sales-led, relationship-based account management”.

Mr Wilkins says this will make interaction with CGU more streamlined and improve service to customers.

“We are creating centres of excellence by bringing claims teams that are currently embedded in business units into claims service centres to drive consistency, best practice, operational efficiencies and service excellence,” he said.

The new underwriting division will deliver competitive products, responsive pricing and risk management while a new service centre will deliver policy and administration services to brokers and agents to ensure experienced staff provide support.

Mr Wilkins welcomed reforms such as the common flood definition, which the industry had called for years ago but seen rejected by the Australian Competition and Consumer Commission. He also called for more work on flood mitigation.

He says the industry’s three biggest challenges are understanding, affordability and accessibility of insurance.

The floods highlighted a lack of understanding about insurance, and when IAG recently surveyed 1000 households nationally it found one in 10 had no home building cover and two in five no contents cover.

Mr Wilkins says affordability is being challenged by the sheer number of claims, rising reinsurance costs and broader policy coverage following the introduction of flood cover.

“The affordability issue has seen 30% of people try to reduce their premium by either dropping cover completely or increasing their excesses,” he said.

Accessibility would become more of an issue over time as insurers withdraw from markets that he says are too risky to insure, like strata in Far North Queensland.

Mr Wilkins says affordability can be improved through investment in mitigation, such as with levees, properly maintained fire breaks and improved drainage.

Removing state taxes from insurance would also make it more affordable.

He told the convention audience that Steadfast contributes more than $360 million of CGU’s $2.3 billion annual premium.