IAG MD and CEO Peter Harmer says his decision to announce now that he’s leaving the group before the end of the year will allow a “flexible nine-month transition during which time my successor will be appointed”.

In a note to staff this morning, Mr Harmer says that after almost five years as CEO and 10 years with IAG, “this is the right year to make the transition”.

As insuranceNEWS.com.au reported in a Breaking News bulletin this morning, Mr Harmer will retain oversight of the overall strategic direction and performance of the group, while CFO Nick Hawkins has been appointed as Deputy CEO to lead the group leadership team and “have accountability for the day-to-day running of the company”.

“The transition has been designed to allow me to continue to focus on our response to, and recovery from, COVID-19, as well as to manage some of our key external relationships in what we know is an increasingly complex and dynamic environment,” Mr Harmer says.

Australia Division CFO Michelle McPherson, who joined IAG from Nib at the start of the year, has been appointed acting Group CFO.

Industry insiders have commented to insuranceNEWS.com.au that Mr Harmer’s note to staff provides no detail on the succession process, which was covered in IAG’s official announcement earlier today.

In that statement IAG Chairman Elizabeth Bryan says the board has been discussing Mr Harmer’s plans since a period of illness he suffered last year, and a “search process” is already underway, “supported by the board’s ongoing succession planning that ensures a strong field of internal and external candidates is available”.

However, observers say the coronavirus emergency would hamper any global executive search, and that the group has two excellent candidates for the top job in Mr Hawkins and CEO Australia Mark Milliner.

Mr Milliner is highly regarded in the industry, and manages about 75% of the group’s assets. His role has not changed under the new arrangements, with Ms Bryan saying he “remains focused on business growth and responding to the bushfire recovery process, as well as the ongoing operational challenges of COVID-19”.

Mr Harmer recruited Mr Milliner from Suncorp, where he had built a reputation for the strategic and operational management of the group’s multi-brand strategy. He moved across to IAG in April 2016 after the controversial appointment of David Cameron to run Suncorp, and became CEO of the newly created Australia division in July 2017.

While less well-known in the industry than Mr Milliner, Mr Hawkins has been a strong representative for IAG in investment and financial circles. A 19-year veteran at IAG, he has served in a variety of roles including finance, strategy and asset management. He was CEO of the group’s New Zealand operations from 2006 until mid-2008, when he was appointed Group CFO.

Mr Harmer says in his note that the strength of IAG’s balance sheet “and the calibre of our leadership means we are well positioned to manage through this current period of uncertainty, and we can look to the future with confidence”.

“I have enjoyed a career in insurance spanning more than four decades and it has been a tremendous privilege to lead IAG. I am incredibly proud to have been able to lead a company with such a strong culture and commitment to purpose.

“I am also proud of the work we’ve done over the past five years and the strategy we have set to deliver. It’s our commitment to disciplined execution, innovation and our unwavering customer focus which means we now have options on our future and the right to self-determination.

“As we start to transition to the next era of our strategy, I know the future will be bright for IAG.”