Wednesday, April 25, 2018

IAG stalls Asia expansion to focus on home markets

IAG will shelve its growth strategy for Asia for the time being because of declining commercial and regulatory conditions that have restrained opportunities for its expansion.

Instead, the company will shift its focus back to its Australian and New Zealand markets, said chief executive officer and managing director Peter Harmer.

For 18 months, IAG has scoured Asia for expansion opportunities — particularly in the markets of Thailand, Malaysia and India — but has not come up with anything positive.

In fact, in these countries, IAG’s earnings have dived by more than 50% during the first half this year.

Given these circumstances, Harmer said it would be unwise to make more investments in Asia, at least in the short term.

IAG, which is listed on the Australian Securities Exchange, was formed by the demutualisation of the NRMA Insurance business in July 2000 and a return of shares to NRMA members.

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