IAG’s online channel has recorded a 16% rise in volumes this year, with about 12% of new business now transacted online, CEO Mike Wilkins says.

“We now have significant functionality across multiple channels, allowing us to compete with the newer players,” he told the Association of Superannuation Funds of Australia conference last week.

“You can buy a policy, get a quote or update your details whenever you like through your mobile phone or other mobile device.

“If we had sat back and relied on our branch and call centre network, we would now be at a serious disadvantage.”

IAG’s response to the challenges posed by new technology “probably wasn’t as quick as it should have been”, Mr Wilkins told delegates.

However, the launch of online-only insurer The Buzz in 2009 – which IAG closed in June last year – worked to IAG’s benefit, he says.

“Because it is no longer in operation, some would suggest The Buzz was a failure, but it was actually a significant learning experience we still benefit from today.”

He says IAG learned how customers interact with online-only insurers, what features and benefits are important, how they navigate websites and how they buy and claim.

These lessons have been applied to IAG’s other retail brand websites.

“These brands are optimised for smartphones and tablets and we’ve released six successful applications for mobile users.”

In future, insurers will have to be smarter about collecting and using information for competitive advantage, Mr Wilkins says.

All financial services companies will be able to predict customer behaviour using predictive analytics, which will inform pricing, communication and acquisition strategies, he told the conference in Perth.