Wesfarmers Insurance (WI) operates in the general insurance and financial services sector. Our insurance businesses include Lumley Insurance (LI)* and Wesfarmers Federation Insurance (WFI) in Australia and Lumley General New Zealand (LGNZ). Our insurance broking businesses include OAMPS Australia, OAMPS United Kingdom (UK) and Crombie Lockwood in New Zealand (NZ). We also have underwriting agencies, premium funding businesses and superannuation and financial management operations. OAMPS UK is included in this year’s report for the first time. We are represented in 126 locations in Australia, 27 offices in New Zealand and five in the United Kingdom. At 30 June we employed 3,092 people. For further information on our businesses visit www.wesfarmersinsurance.com.au

* During the year LI traded as Lumley General (Insurance Australia).

For more information on Insurance view their online 2009 Sustainability Report.

In 2009 we took several important steps toward becoming carbon neutral. During the year a full carbon lifecycle analysis was completed for all our businesses. This has allowed us to calculate our carbon footprint and identify the key areas where energy is used or embedded in the products and services we purchase. We also conducted an energy audit at the WFI offices at Bassendean (Western Australia) which is one of our largest sites. Lumley Australia rolled out an online employee awareness programme on climate change which demonstrated how individual choices can have an impact at home and work.

During the year our major safety initiative ISAFE focused on managing key safety risks and reducing workplace accidents. An occupational health and safety specialist was engaged to oversee programme implementation in our Australian businesses.

We were also involved in relief efforts following the tragic Victorian bushfires in February through providing on-the-ground support and emergency cash relief to our customers and donating to the Red Cross Victorian Bushfire Appeal 2009. In addition we responded to this tragedy by immediately engaging our catastrophe plans. We paid out over $43 million in claims and expect to pay approximately $86 million by the time our clients have rebuilt.

We contributed $841,068 to a range of local community partnerships supporting initiatives such as farm safety, local community welfare organisations and education.

Our total energy consumption increased from 82,487 to 92,194 gigajoules and our carbon dioxide equivalent (CO2e) footprint decreased from 12,975 to 12,236 tonnes.

We launched a major safety programme, ISAFE, across our businesses. The programme provides an occupational health and safety management and improvement framework tailored to each business. A full-time specialist has been engaged to assist each business to develop and implement their own programmes.

We extended the successful Leadership Development Programme (LDP) referred to in last year’s report into a new programme Wesfarmers Insurance Leadership Development (WILD), which reaches more people in our business with customised leadership training.

Our businesses participated in a range of employee health and wellbeing programmes, including Crombie Lockwood’s entry of 15 teams in the Kiwi Workplace Challenge. The programme encourages regular exercise and community involvement through the workplace.

WFI publish an environmental policy on its intranet and has dedicated pages covering business consumption data, news, suggestions and details of its environmental committee. WFI also conducted reviews on usage of a range of consumables including paper, toner cartridges, electricity and fuel. The results of the analysis are reported on the intranet to improve employee understanding of the drivers and trends of consumption patterns in the office.

During the year LGNZ switched to Forest Stewardship Council-certified paper for use in its printers. Our businesses in some Australian and New Zealand cities expanded their participation in the Earth Hour awareness initiative.

The most significant initiative for the year has been progress towards becoming carbon neutral for our Australian operations. We conducted a Carbon Lifecycle Analysis which quantifies the CO2e impact of our business operations as well as the impact of the goods and services that we consume in operating our business. We have identified the key components that contribute to our carbon footprint and will be putting in place measures to manage this impact. In addition we have purchased and retired sufficient carbon credits to become carbon neutral in 2009/10.

In April 2009 we consolidated the two general insurance licences of our Australian insurance companies (WFI and LI) into a single general insurance licence, retaining two distinct brands. This will streamline and improve our reporting and governance.

During the year we streamlined our management structure to provide greater focus and to encourage best practice. Two new leadership groups were established for broking and underwriting comprising the chief executive officers and some senior managers from each of these businesses. The structure is intended to provide greater focus and to encourage best practice in addition to the separation of strategic guidance and business development between the broking and underwriting operations.

Our community support programme is focused on the local communities where our businesses operate. Examples include:

• WFI supports the Kondinin group, a leading not-for-profit farm improvement group. The support enabled a research report on rural health covering accidents, depression, general health and a range of safety issues specific to farming. The report content was published online and in regional press.
• LI supports a range of social causes and community groups. It is a corporate sponsor of the Create Foundation which supports young people in foster care. LI also provides substantial sponsorship to the Juvenile Diabetes Research Foundation and is a supporter of the Lumley Exchange Research Fellowship of Surgeons.
• Crombie Lockwood donated goods valued at over NZ$16,000 to Queenstown (New Zealand) schools. In addition to this staff raised NZ$10,000 for the Child Cancer Foundation.
• OAMPS again supported the Australian Youth Sailing Championships which enabled many young sailors to compete for the Australian championship, with the winners earning the right to compete in the World Championships in Brazil. OAMPS also supported the Ballarat Cancer Research Centre, Street Swags (a programme to provide shelter for homeless people in Australia) and the Inspire Foundation, an Australian organisation focused on reducing youth suicide rates.
• Lumley General New Zealand supported the 2008 Shave for a Cure which supports the Leukaemia Foundation.

During the year we made provisions to pay $1,045 million in claims to our customers who suffered insured losses. This included support for various natural catastrophes in Australia during the period. We paid $201 million in wages and salaries to our 3,092 (full-time equivalent) employees. In addition we made provisions to pay $45 million in fire service levies.

We also purchased 26,074 tonnes of carbon credits under the New South Wales Greenhouse Gas Abatement Scheme. The investment has enabled other carbon dioxide emitters participating in the scheme to reduce their emissions and by WI retiring these credits we will offset our Australian emissions for the 12 months to 30 June 2010.