Insurance Australia Group CEO Steps Down After Rejection of QBE Bid

It didn’t take long for a number of angry shareholders of Insurance Australia Group (IAG) to exert enough pressure to force the summary resignation of CEO Michael Hawker. IAG’s board rejected the A$8.2 billion (US$7.878 billion) offer last week (See IJ web site – https://www.insurancejournal.com/news/international/2008/05/21/90203.htm) – a decision that apparently discounted the substantial 22 percent premium QBE had offered.

Following Hawker’s resignation, IAG named Michael Wilkins as his successor. He has over 25 years of experience in the insurance industry, and took over as IAG’s Chief Operating Officer in November 2007. Prior to this appointment he was Managing Director of Promina Group Limited, from August 1999 until March 2007. Previously he was Managing Director of Tyndall Australia Limited. He has also served as a director of the Insurance Council of Australia and is also a past director of IFSA.

IAG Chairman James Strong nonetheless praised Hawker’s leadership, noting that during his tenure “revenue (net earned premium) has grown from A$2.8 billion [US$2.69 billion] to A$6.7 billion [US$6.437 billion] or at an annual compound growth rate of around 16 percent. Return on equity has averaged approximately 15 percent per annum.

Hawker’s resignation statement indicated that he regretted leaving IAG. He stressed how valuable the Group is and indicated that he believes “we are currently undervalued and our underlying performance is improving.” He added, however, “I also believe I have lost the confidence of a number of our shareholders which is not tenable for the company. Given ultimate accountability sits with me, I have offered my resignation to the Board.”

Source: Insurance Australia Group – www.iag.com.au

Topics USA Australia