Insurance Australia Group's (IAG's) broker-sourced business grew gross written premium (GWP) by just 1.1% in FY26, a fraction of the 17.8% expansion in its direct-to-consumer arm. Jarrod Hill (pictured), CEO of CGU and WFI says the gap comes down to where the insurer is choosing to compete and is not a retreat from brokers.
Hill was direct about why the intermediated channel is growing more slowly.
"When you think about the commercial insurance space, it's far more cyclical than the retail space," he said. "We have capital coming in and out of the Australian market and it's a highly competitive phase of the cycle at the moment in commercial insurance." More capital chasing the same commercial risk, he said, means more competition and more volatile pricing than IAG sees on the retail side. That characterisation lines up with APRA's own intermediated general insurance statistics, which track how business placed through brokers moves across the market over time.
That volatility is shaping deliberate portfolio decisions rather than passive drift, according to Hill. "As an underwriting company, we'll make decisions where we compete and where we play, and we proactively shape our portfolio to deliver the results we need," he said. "At times we're not able to deliver the growth that ideally we'd like, and we're in one of those phases at the moment."
Even so, Hill pushed back on reading the headline number as uniform weakness across IAG's broker book. Two-thirds of the intermediated business, he said, is growing at 4–5%, concentrated in the SME, rural and broker personal lines segments. It's the mid-to-large commercial space, where competition is most intense, dragging on the overall figure. Asked to break that down further, Hill pointed to specifics.
"Looking at our CGU business – we've grown our SME and rural business well with our brokers," he said. "On mid to large commercial property, we're pretty flat and we've gone slightly backwards on our long tail classes where we've seen increased competition, particularly in PI."
Hill also gave brokers a sense of what's coming on the technology front, following IAG's earlier alliance with RACQ that expanded its Queensland footprint and added integration pressure across the group's platforms. The long-term goal, he said, is dynamic API integration but getting there means meeting brokers where they currently are.
"We'll continue to connect through Sunrise with brokers and we have our Padlock product already operating in the Sunrise environment very effectively," he said. Two new products, including a Hobby Farm offering, are set to go to market over the next two quarters, with SME capability being built into Sunrise before the end of the calendar year.
Hill ruled out a single unified broker portal as the end goal. "The broker portal is there for our unique products, where brokers may want to trade on those," he said. "In our core products - SME, motor - we'll meet brokers where they're looking to trade. Some will continue to trade through Sunrise, others will have their core trading platforms, others will want API connectivity."
The comments follow a period IAG itself has described as one of significant change - the insurer's profit came in well below the prior year's result, a decline the company attributes to FY25 having benefited from a $330 million pre-tax business interruption provision release and $195 million in favourable natural peril experience, neither of which repeated in FY26. Reinsurance costs also climbed over the year and IAG flagged a deepening reliance on artificial intelligence across underwriting and claims, including a new partnership with OpenAI aimed at improving claims handling during severe weather events – a trend Hill's own comments on Sunrise and API connectivity suggest is being mirrored on the distribution side of the business. For brokers, the more immediate signal is IAG's own FY27 guidance: mid single-digit growth in retail against only low single-digit growth in the intermediated channel, suggesting the gap Hill described isn't expected to close quickly.
