Introducing API and mobile-first architecture in order to push the internal reuse of technology and implementing social coding are two of the key priorities for the Digital Labs wing of IAG in FY17.
IAG Digital Labs and IAG Customer Labs, which focuses on customer experience, were created by the insurer as part of a restructure in December, with both sitting underneath the IAG Labs banner.
As part of its full year results announcement today, IAG said that Digital Labs would undertake a simplification of the insurer’s core policy and claims products, processes and platforms to drive efficiencies across its Australian and New Zealand businesses.
In its results the insurer recognised a non-cash, pre-tax charge of $198 million for accelerated amortisation and impairment of capitalised software.
“This follows a detailed review of the group’s assets in light of an environment of unprecedented digital disruption and the system simplification that the group’s commencing,” IAG CFO Nick Hawkins said today during a results presentation today.
“We have identified this in our corporate expenses line and it has had no impact on our cash earnings for dividend purposes and had no impact on our regulatory capital. We believe we have adopted a prudent approach to the recognition of software capitalisation and expenditure.”
“We have a core technology simplification program underway to reduce 32 policy and claims systems down to two; in addition we’re consolidating our insurance licences from nine to two,” Peter Harmer, IAG’s managing director and CEO, said during his presentation.
Digital Labs will also work on developing IAG’s marketing automation, social and loyalty platform in FY17 and look at leveraging emerging technologies, including the Internet of Things, blockchain and drones.
Its customer experience counterpart, Customer Labs, said one of its priorities in FY17 was taking Ambiata’s marketing attribution engine to market. IAG acquired Ambiata, which was developed at NICTA (now Data61), in FY15 and Customer Labs has been developing and testing its software capabilities as a service product offering for the broader market, the insurer said.
“Ambiata has developed an analytical tool providing the intelligent analytical layer that connects an organisation’s data asset to its customer,” IAG said. “It places measurement and model-build in the hands of a corporation’s data scientists and cognitive intelligence at the centre of an organisation’s decision-making. Already deployed in a number of top 20 ASX organisations, this product is being launched in Asia and North America over the next 12 months”.
For FY16 IAG reported a net profit after tax $625 million, down 14.1 per cent on the prior year.