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Group mentality New Zealand’s broking market is undergoing rapid change as independents cluster within larger organisations By Wendy Pugh
AUSTRALIA’S TWO LARGEST BROKER groups AUB and Steadfast have staked their claims in New Zealand and small brokers are finding a safe haven within them as the market faces a range of new challenges. AUB Group says its large broking footprint in the country provides a launching pad for expansion. “It’s a market that needed shaking up from an insurance distribution point of view – and I say that in the politest possible way – and we’ve already started doing that,” AUB Group Managing Director Mark Searles says. After strategic purchases in the past two years AUB says its NZbrokers business is now the largest cluster group in the country, and the company’s New Zealand operations rank third in the market by gross written premium (GWP). “From our point of view, we have gone in 56
there and created what we call a third force, and I am sure it has ruffled a few feathers along the way, but I think it is down to a strategy well executed.” Mr Searles tells Insurance News. The New Zealand broking market is consolidating as smaller businesses find it increasingly tough to remain as independents, while veteran brokers in an ageing sector are looking to retirement and exit pathways. Sydney-based Steadfast cast its eyes across the Tasman in 2013 as it prepared for an Australian stock market debut, and has since brought more brokers into the fold. Rothbury was the first brokerage from New Zealand to become a Steadfast member. The four principals at that time had an average age of 56 years, typifying a demographic looking at change. insuranceNEWS
October/November 2016
Later, it purchased the Allied Insurance Group broker network. The most recent Steadfast annual report says it has 36 brokers in New Zealand and annual GWP of almost $300 million, giving it a 10% share of the general insurance intermediary market. AUB says it is offering collaborative power and an owner-driver model, where equity is sold in the brokerage but the principal can continue to manage day-to-day operations. The two largest New Zealand broking players have well-established positions and are part of global groups. UK-headquartered Aon, which has more than 76 offices globally providing a range of services, has reported “solid” or “strong” New Zealand growth in most quarterly earnings updates in recent years. Rival Crombie Lockwood dates back to