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

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news