IAG mulls closing all but one of its State branches, affecting 91 jobs

Insurance Australia Group may close all but one of its 22 State branches in New Zealand a bid to consolidate its national direct insurance network as more customers phone or turn online for assistance.

The Auckland-based insurer will decide in mid-October whether to close the bulk of its branches, affecting 91 jobs, as 94 percent of its customers used its website or called for their insurance needs, it said in a statement. The exception would be its Riccarton branch in Christchurch, which covers specific customer needs relating to the 2010 and 2011 Canterbury earthquakes.

State is part of Sydney-based IAG's direct insurance division, which also includes AMI and employs 1,400 people across New Zealand. There is no intention to close any of AMI's 65 shop fronts, the company said.

"We are investing in new-look AMI stores that reflect the brand's close connections into local communities," said executive general manager Craig Olsen. "State's branch network is less extensive, which is why we are looking to consolidate our overall presence."

IAG also owns insurance broker NZI, and earlier this year bought Wesfarmers' Lumley Insurance for A$1.8 billion, adding the WFI and Lumley insurance brands to its existing stable.

Last month, IAG's New Zealand division increased earnings to A$183 million in the 12 months ended June 30, from A$117 million the year earlier, in part from a rise in online sales. The local unit raised its gross written premium revenue by 17 percent to A$1.85 billion. The insurance margin increased to 11.5 percent from 8.9 percent in 2013.

(BusinessDesk)