What: Property and casualty insurer Insurance Australia Group Limited (ASX: IAG) has announced plans to implement a new Australian operating model. The new model will comprise two customer facing divisions – Personal Insurance and Commercial Insurance – supported by a new Enterprise Operations division.
So what: According to CEO Mike Wilkins the new model will allow IAG's Australian operations to maximise value from the planned acquisition of Wesfarmers Ltd's (ASX: WES) underwriting division. With the acquisition set to cost $1.85 billion, IAG's shareholders will certainly want to make sure their company gets the integration right.
Now what: The performance over the past five years of Australia's two largest insurers – IAG and QBE Insurance Group Ltd (ASX: QBE) couldn't have been more different. Whilst IAG's share price has gained 60%, QBE's shares have fallen 46%. As was highlighted here, a strong case can be made for adding IAG to your portfolio. The restructure and imminent acquisition only adds to the appeal of IAG's stock and makes this insurer definitely worthy of a place on your watch list.
