Acquisitions create New Zealand’s largest insurance cluster

Austbrokers targeted acquisitions create New Zealand’s largest insurance cluster network

Sydney, 25 November, 2014: ASX-listed Austbrokers Holdings Limited (ASX:AUB) today announced it will acquire 100 per cent of New Zealand’s BrokerWeb Management Limited, as well as a 50 per cent stake in the country’s largest independent broking operation BrokerWeb Risk Services Limited in a deal expected to be worth over NZ $20 million.

The transaction signals a major shake-up in the New Zealand insurance broking industry, which has long been considered a duopoly between insurance brokers Aon and Crombie Lockwood. It is one of the largest transactions undertaken by Austbrokers Holdings, and was executed through its 80% subsidiary NZ Brokers Holdings Limited.

With the acquisitions combined, Austbrokers Holdings immediately becomes New Zealand’s largest insurance broking cluster network, as well as the largest Australasian-owned insurance broking group in New Zealand, with $350 million gross written premiums (GWP) and over 120,000 clients.

Austbrokers Holdings Chief Executive Officer, Mark Searles, said “it was part of our targeted strategy to use our proven Owner-Driver model as the platform for growth. Overnight, this approach gives Austbrokers Holdings and our New Zealand partners’ significant market scale and leadership”.

“BrokerWeb Risk Services’ business is already closely aligned with our existing operating model, creating great opportunities for expansion”. Additionally, BrokerWeb Management as a leading broking cluster network, is similar to Austbrokers existing joint venture cluster group partnership in Australia, AIMS - creating further natural synergies.

Together with BrokerWeb and our existing New Zealand partners “we will continue to look for opportunities to leverage Austbrokers’ established and diversified business areas of Insurance Broking, Underwriting Agencies and Risk Services as we continue to grow our New Zealand presence and distribution network,” Mr Searles said.

In line with Austbrokers’ equity ownership model, BrokerWeb Risk Services (BWRS) CEO David Archer, and BrokerWeb Management CEO Jim Harris, will remain in their current roles and lead the daily business operations. All businesses will continue to trade under their existing brands and will leverage support as required from Austbrokers’ group services.

“We are very excited about the future and furthering our planned expansion with the support and partnership that Austbrokers Holdings brings to BWRS,” Mr Archer said. “Over the years we have admired the Austbrokers “owner-driver’ model. We respect the success of many current Austbrokers broking businesses in Australia, which made our decision to partner with Austbrokers in New Zealand a natural fit. With the support of Austbrokers Holdings we can accelerate our plans to be one of the leading broking houses within New Zealand.”

Mr Harris said, “We were impressed by the experience and commitment of Austbrokers Holdings to support our broker members and their clients. We share the same philosophy that the partnership between insurers and brokers is vital in providing quality and sustainable insurance solutions to our clients. We look forward to enhancing the benefits and services we deliver to our current and future members, and to expanding our position as the preeminent broking cluster group in New Zealand.”

Austbrokers Holdings entered the NZ market in 2006 through its partnership with Insurance Advisernet, taking an effective 38 per cent equity stake in Insurance Advisernet NZ, a leading broking group which has grown to have 32 authorised representatives and over $70 million in GWP.

Combined with the BrokerWeb acquisitions Austbrokers becomes a formidable force in the New Zealand insurance market, with $350m in total GWP, more than 70 brokerages and authorised representatives, and 120,000 clients.

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