Insurance Australia Group has entered into a “co-operative arrangement” with giant Japanese insurer Aioi as part of a long-term strategy to expand overseas and deliver sustained earnings growth.

Aioi is one of the five largest non-life insurers in Japan, with 70% of premiums derived from motor insurance. Toyota owns 33% of the company.

IAG CEO Michael Hawker says the agreement is the first step in the company’s long-term strategy to expand overseas. “We have announced our goal to double our gross written premium business in five years,” he said. “We believe we can capitalise on many growth opportunities in Australia in the near term, but to deliver such significant growth in the three to five year horizon we need to examine international opportunities.”

Mr Hawker said the co-operation with Aioi will help IAG develop its personal lines business domestically and internationally. “Our partnership with Aioi is a good fit. Our organisations share a commitment to customers, shareholders, our people and communities. It is prudent for us to continue to look into potential partnerships and research opportunities in foreign markets,” Mr Hawker said.

A spokesman for Aioi said since IAG has experienced intense competition from the liberalisation of the Australian casualty insurance market, “we hope to learn from their operational know-how and database schemes to help bolster our business in Japan.”