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Covering all bases AUB chief Mark Searles says the group’s strategy is helping brokers become trusted advisers By Wendy Pugh

AFTER A FOUR-YEAR transformation program, AUB Group Chief Executive Mark Searles has the company set for a future that offers new opportunities, while keeping risk advisers centre stage. He has reduced AUB’s reliance on Australian broking by adding other sectors to the mix, creating a more diversified company that still builds on its historical strengths. “We have enabled growth coming from new areas, while at the same time looking to protect the core area of Australian broking, working with our partners,” Mr Searles tells Insurance News. “Importantly, the magic is when you connect all that together. The collaboration is really starting to come through, and that is very pleasing to see.” The changes aim to strengthen AUB throughout the market cycle and ensure it offers more value to clients amid challenges facing all traditional sales and advice industries in the age of technological disruption. The company adopted the broad AUB Group name in November 2015 to reflect the new direction, with the previous Austbrokers moniker repurposed for the Australian broking division. This followed a strategic review driven by Mr Searles, who joined the group in January 2013 from local insurer 34

CGU. He previously held senior roles in the UK at companies including Zurich, Sage Group and Lloyds TSB. His appointment to the Sydney-based broking company came as storm clouds were gathering. Commercial premiums were poised for a multi-year slide and interest rates were slipping consistently to fresh historical lows. Nevertheless, other drivers for the company such as policy count, premium funding penetration and cost controls were still heading in the right direction, and the business had continued its pace of expansion, with local broking acquisitions and expansion in niche underwriting agencies. Mr Searle’s diversification leap came with Austbrokers’ entry into New Zealand in 2014, and the creation of the Risk Services division the same year through the purchase of a 50% stake in workers’ compensation business Procare. Further acquisitions in the new areas followed, and last year AUB said it would work with Suncorp to introduce a direct life insurance offering. This broader focus has seen Australian broking’s share of profit fall to about 65% in firsthalf results released in February, down from more than 90% six years earlier. Underwriting agencies, rebranded last year under the insuranceNEWS

Sura label, contributed 15% to earnings, New Zealand broking 8% and Risk Services 12% in the six months to December 31. AUB’s overall revenue grew 15% to $121.8 million in the first half, while group adjusted net profit after tax increased 12.7% to $14.5 million. The company says its new “ecosystem” is now in place. “The connection point is still the risk adviser, so while diversification across the group has taken it away from purely an Australian broking focus to being a whole host of different things, the key contact will always be the broker or the risk adviser,” Mr Searles says. “I don’t see the percentages changing much going forward. I see all areas growing equally.” AUB remains committed to the “owner-driver” model that has served it well since before its Australian sharemarket listing in 2005. The shared equity approach has typically seen the company take a 50% stake in a brokerage, although the percentages can vary, particularly in the underwriting agencies side of the business. “The core point is that it is more about having skin in the game,” Mr Searles says. “It is about working with a partner where you have mutuality of interest.” AUB also enhances its overall clout through the August/September 2017

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