update Insurance Australia Group has partially blamed its sluggish performance in New Zealand on a move to a new technology platform.
The group's managing director and chief executive, Michael Wilkins, today said the NZ arm, which is a small portion of IAG's global operation, was hampered in the past year as it deployed a new Huon/Bonus insurance underwriting technology platform for its direct business.
Fewer New Zealanders bought insurance from ING due to price hikes of up to 30 per cent it had made during the year.
"That was exacerbated by the business not actively marketing itself during the entirety of the year as it was transitioning to a new IT platform. That transition is now complete," said Wilkins.
The move to the Huon/Bonus systems has brought IAG's New Zealand systems in line with its Australian business, which has been running the system for some years.
The system overhaul was also pegged for IAG's increased operational expenses.
"Our expense ratio during 2008 increased to 29.1 per cent, largely due to increased costs in the Australian direct business, and new systems implementations in New Zealand," said Wilkins.
Reported underwriting expenses increased by AU$13 million in 2008 due to the systems upgrade, which included development costs.
IAG is counting on the new system to improve the company's underwriting capability, and improve access to data for more targeted marketing campaigns.