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

 

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news