Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Wesfarmers exits insurance industry with sale of units

Wesfarmers exits insurance industry with sale of assets including NZ’s Crombie Lockwood

By Suze Metherell

April 7 (BusinessDesk) – Wesfarmers has agreed to sell its broking and premium funding units for A$1 billion to Arthur J. Gallagher & Co, the New York stock exchange-listed insurer, completing the Australian company’s exit from the insurance industry.

Wesfarmers will get a further A$150 million distribution to repay premium funding as part of the sale, which includes its Crombie Lockwood, Lumley Finance and Monument Premium Funding brands in New Zealand. The company expects to make a pretax profit of between A$310 million and A$335 million from the transaction, which is conditional on Australian, New Zealand and UK regulatory approvals.

Illinois-based AJG is also acquiring Wesfarmers’ OAMPS Insurance Brokers in Australia, the country’s largest insurance broker, and OAMPS UK.

The sale will complete Wesfarmers’ divestment of its insurance division. It sold its Australian and New Zealand underwriting businesses, WFI and Lumley Insurance, last year for A$1.85 billion to Insurance Australia Group, which operates the State, NZI and AMI brands and is New Zealand’s largest general insurer.

Last month, the IAG deal was approved by the Australia Competition and Consumer Commission and has New Zealand’s Overseas Investment Office Approval, but is still awaiting approval from New Zealand’s Commerce Commission, as well as the Reserve Bank of New Zealand and two other Australian regulators.

The Commerce Commission extended the deadline for its decision by a month to the end of April. In submissions to the commission, rival insurance groups have raised concerns about market dominance should the deal go ahead.

Wesfarmers said all up, it will have sold A$3 billion of insurance assets for a total pretax profit of between A$1.01 billion and A$1.09 billion. Its brokerage operations generated A$331.1 million in revenue in the year ended June 30, 2013, of which between 40 and 45 percent was derived from its New Zealand operations.

AJG operates in 26 countries and is one of the world’s largest risk management and insurance broking companies.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news