CGU is to remain the primary intermediated brand of IAG Commercial, with Lumley to become the umbrella brand for IAG’s underwriting agencies business.

Lumley’s intermediated business will be absorbed into CGU following IAG’s takeover of the Wesfarmers Insurance underwriting business on July 1, but WFI will continue as a specialist rural and small business insurer.

IAG Commercial Insurance CEO Peter Harmer says the company researched brokers’ responses to the CGU and Lumley brands and found CGU has the greatest resonance.

But it is mindful of the market’s connection to the Lumley name and is repositioning it as Lumley Agencies, he told insuranceNEWS.com.au today.

IAG aims to “aggressively grow” in the underwriting agency market.

Mr Harmer says the greater strength of the businesses and new investment will enable it to launch more products and services.

He also wants to work with partners to set up new agencies.

Lumley Agencies’ portfolio will include Strata Unit Underwriters, Accident & Health, Millennium Underwriting Agencies and IAG’s half share of National Transport Insurance.

IAG is also retaining the WFI brand because of its strong heritage and loyalty in regional areas.

“The farm gate, face-to-face model has real value and it does not compete as directly as the CGU and Lumley brands in their market,” Mr Harmer said.

He says CGU and Lumley policies will be combined to achieve the “best of both” in a new set of CGU products to be released next April.

“We have seen some great product ideas in Lumley.”

Brokers say both CGU and Lumley have elements they value and want to see retained.

The combined operation will have “vastly increased risk appetite, a broader range of products and services and deeper pools of talent”, Mr Harmer says.

When IAG acquired Wesfarmers Insurance it gave its integration team 100 days to understand the businesses and brands.

A new commercial leadership team was appointed in August and the next layer of leadership, including state managers, will be announced in early December.

Mr Harmer says Lumley’s intermediated business will be migrated onto CGU’s new suite of products on renewal in the second half of next year, and this will take about a year.

There will be no derogation of cover during the transition. Customers will have at least the same level of cover.

CGU is due to release its new policy management system at the end of this year, and Lumley’s claims and underwriting systems will be progressively moved onto the system with transfer of WFI policies to follow.

On the subject of redundancies, Mr Harmer says the group will become a more effective and efficient organisation as it benefits from increased scale.

IAG employs 10,000 people in Australia and would expect 10-15% to move every year, so he says natural attrition will minimise disruption to staff.