In line with our purpose, we engage in the communities in which we operate to help them reduce and manage their risks.

Like many other companies, we continue to measure our community investment by focusing on the inputs rather than on the output or impact of that investment. It's not always possible to quantify the economic or other benefits of community investment. Where we are able to quantify an impact, this tends to be at a specific program level.

However, while the benefits and value of community investment and partnerships may be difficult to measure, they are undeniable. A thriving community is a key plank to having a thriving organisation. We recognise that as an organisation our investment will have a direct impact on our business through the reduction of risk. You also cannot underestimate the pride that employees feel through our community involvement.

Consequently, we continue to measure community investment through inputs - cash, in-kind contributions, time given and where possible impacts and outputs. Targets for community investment are set at a partner level and we monitor our performance against these commitments. We are clear that community investment is a sound investment choice even in difficult economic times.

Our Direct Insurance business in Australia is our largest business, and as such continues to drive a significant proportion of our community investment. Direct Insurance continues to focus on opportunities that align with the business' priority of helping to build safer communities, supporting communities at a national, state and local level. For example, the ACT Home Safety Program, partnering with Mission Australia's South West Youth Services to support young people in the community who have recently left the juvenile justice system, as well as the community grants program through which 155 community grants were provided in FY11 to various groups committed to making communities safer.

In New Zealand, there has been continuing investment in the Surf Lifesaving NZ, Swimming NZ and Ocean Swim NZ partnerships which accounts for the increase in spend that has been experienced across the year.

CASE STUDY

CGU recognises local business excellence

In FY11, CGU will sponsor the Ballarat Business Awards for the 23rd year running, recognising innovation, excellence and the opportunities offered by Ballarat and surrounds to those who aspire to achieve within their industry.

Last held in August 2010, the CGU Commerce Ballarat Business Excellence Awards celebrate the contribution local residents, customers, clients and business people make to the city's economic and social fabric. They also provide an opportunity for local businesses to gain insights into further growth and development.

CGU Insurance is proud to be the primary sponsor of the awards that reflect the vibrancy of the community. CGU, in partnership with our local brokers and intermediaries, strongly believes in supporting local business initiatives across the country. The Ballarat Awards are a great example of how small and medium business growth is a major driver to the economic and social success of the region.

Working with our suppliers

An important factor in determining the level of a premium is the cost of any claim made. That's why IAG works with our suppliers to ensure we manage the cost of claims.

The level of devastation caused by the Canterbury earthquakes has meant that there is significant upwards pressure on claims costs, resulting from the cost of the amount of demolition required. In New Zealand IAG has therefore been working very closely with Hawkins construction, its construction partner, to manage the cost of claims by minimising waste that goes to landfill through a recycling program. This not only benefits our business by decreasing the costs of demolition, in turn helping us manage the cost of claims, but also benefits the environment by reducing the waste going to landfill.

The process has seen building materials, such as concrete, brick, metal and timber, removed and separated by Hawkins during the demolition process, to ensure that as much as possible is recycled. Over the period Hawkins has been working in Canterbury since the earthquake, 78% of building materials were recycled, meaning only 22% of all building waste went to landfill. The removed salvaged materials are then crushed (in the case of concrete), treated, re-used as scrap or re-sold.

In another part of our business, NRMA Auto Glass is working with its waste provider Visy, to ensure glass from broken or damaged doors, front and rear windscreens, as well as float or flat glass is recycled. Using the onsite bins, in excess of 90% of glass is recycled, again helping us to manage claims costs.

The glass is cleaned of excess urethane, rubber, small metal pieces and wire, and is then crushed and sorted. It is remanufactured into glass bottles and jars, insulation and glass abrasives by Visy and is also supplied to glass manufacturers for re-use.