IAG says the commercial pricing environment in Australia will remain challenging, with no reprieve expected until at least the end of next year.

But having said that, IAG CEO Mike Hawker told an IAG investor briefing that rate reductions seem to have slowed, particularly in short-tail classes.

The briefing was held to enhance investor understanding of the group’s operations, after its share price rose 2%.

Despite the soft market, CGU Insurance CEO Mario Pirone says the insurer will not undercut rates.

“As the market remains soft, we’ll maintain our pricing discipline to reduce the likelihood of writing unprofitable risks,” he said. “We’re adopting a proactive, strategic approach to managing our business in the context of the current soft market.”

IAG Personal Lines CEO David Issa says new sales and retention rates are improving in personal lines at NRMA Insurance, but it’s hard to drive the flow through to gross written premium.

Not that IAG isn’t trying, with incentive payments the best way to enthuse staff. “While commercial rates are still falling, IAG is targeting some expansion by remunerating underwriters with a 50% skew to growth,” he said.

Mr Issa says there are also near record highs in IAG’s core markets of NSW comprehensive car insurance and home insurance.

In relation to the smash repairer issue, Mr Issa says IAG has strengthened relationships with its repairer network and the Motors Traders Association of NSW.

IAG Asia CEO Justin Breheny says the insurer plans to treble gross written premium in its existing operations (including China) over the next five years.

Mr Breheny says this growth may be further supplemented by acquisitions in countries other than those in which it now operates.

IAG has a presence in Thailand and Malaysia and is negotiating a 24.9% stake in Chinese insurer CPIC. However, the timing has been delayed due to complications regarding the listing of the parent company.

He says further acquisition opportunities exist in Thailand and India, potentially through a partnership.