The telephone still accounts for 60% of IAG’s direct sales, with the internet only generating 15% of business, according to IAG Australia Direct CEO Andy Cornish.

Speaking at the Morgan Stanley Insurance Forum in Sydney last week, he said branches account for 25% of sales, but the impact of the internet cannot be ignored.

Mr Cornish says the number of websites consumers look at illustrates the importance of the internet when they are researching cover.

Research shows 32% look at three sites when seeking cover online, while 12% look at four sites. Only 18% look at five or more sites to find cover, while 21% look at just one insurer.

Mr Cornish says this supports IAG’s integrated multi-channel approach to direct insurance with a number of well-known brands.

“We have 22% of motor new business customers commence the purchasing process online,” he said. “Of those customers who commence online, 60% purchase through branches or call centres.”

He says IAG plans to develop a fully transactional digital capability for the direct business together with seamless integration of products and services across all channels.

“We want distribution nimbleness and the ability to tune a model in response to channel dynamics,” he said.

This includes creating the right price for direct insurance with world-class risk assessment capability. It includes low-cost delivery while creating insurance that is easy for consumers to buy and own.

Mr Cornish says the direct business now has one pricing engine across all brands based on data volume and insights.

“Our individual risk-based pricing capability incorporates topography, identifying and pricing perils precisely,” he said.

The IAG Direct business has been growing steadily, with gross written premium for the first half of this financial year almost topping $4.2 billion.

The renewal retention rate since June 2009 has remained at about 90%.