AUB Group continues strong growth in New Zealand with new acquisition

AUB Group through its equity partner BWRS acquires leading Waikato-based broker, Lowe Schollum & Jones Ltd

Sydney, 4 December 2017 – AUB Group has announced its New Zealand growth and expansion strategy continues to gain momentum as equity partner, BrokerWeb Risk Services (BWRS) expands its national footprint by acquiring Hamilton-based insurance broking firm, Lowe Schollum & Jones Ltd (LSJ), effective immediately.

Mark Searles, CEO and managing director, AUB Group, said, “The market continues to be active, and alongside our strong organic growth, we are elated that we are building further momentum by adding new partners to our network in high growth regions across Australia and New Zealand.”

“This acquisition highlights the long signalled and continued expansion of AUB Group in New Zealand. We are excited for our partner business, BWRS, and its national expansion. While backed by the professionalism and scale of AUB Group and BWRS, LSJ will remain locally run, by local professionals, for local businesses and clients.”

LSJ has more than 1,800 clients and a strong reputation in the Waikato, making it a strong addition to the AUB Group family.

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About AUB Group Limited. AUB Group (ASX:AUB) is the leading equity-based risk management, advice and solutions provider in Australasia. Operating across a broad spectrum of risk and insurance, AUB Group is providing total risk solutions for clients. A top 250 ASX listed company, AUB Group comprises 75 equity businesses that form leading insurance broking networks (Austbrokers and NZbrokers), underwriting agencies (SURA) and specialist risk services. Serviced through partners, the group represents more than 450,000 clients, 3,000 employees, across 220 locations. For more information, visit www.aubgroup.com.au

 

 

Hardening market will give brokers a chance to demonstrate value

With all signs on the horizon pointing to a hardening market, clients who have been paying relatively low premiums may face increases for some products. This can create frustration and dissatisfaction unless, as their broker, you can work closely with your clients to communicate the reason behind the changes.

More importantly, acting as a trusted risk advisor, brokers have an opportunity to demonstrate significant value by collaborating with clients to explain the changes in the market and offer ways for them to navigate these changes. You can help clients reduce costs, mitigate risk, or change their coverage to better suit their requirements, offsetting any premium increases.

Signs point to a hardening market

While rates aren’t hardening across the board, we are starting to see pockets of the market show signs of hardening. In the past, when the market turned, it turned as a whole. Now, with a more fragmented insurance marketplace, insurers are increasing premiums in sections where losses are higher and remaining competitive in other areas such as specialty lines.

Capacity in the industry remains significant but it’s shifting around to accommodate new product areas such as cyberinsurance, which is increasing in popularity as people come to understand its significance.

Recent losses in the United States due to weather-related events are likely to affect some global markets, but it remains to be seen whether the Australian marketplace will see increased premiums.

The industry is seeing more of an appropriate approach to movement in rates. Predicting a movement in one product line won’t necessarily translate to an average of market movement overall. The market is most likely to stabilise rather than experience significant movement across the board.

There will be two potential responses to risk. Some insurers may look to diversify risk, which is a positive approach, or they may withdraw from product lines or reduce capacity, which is a more negative approach. The market will see varied responses over the next 18 months to two years.

A more bespoke approach

The rise of insurtech means brokers and insurers should be able to take a more bespoke approach to products in the future. This new technology sector will help insurers offer highly-individualised, custom-tailored products for businesses and individuals, making the insurance market more competitive.

Insurtech lets insurers and brokers deliver a more customer-centric experience. This will be important as clients struggle to understand the reasons behind rising premiums. Insurtech’s use of data and analytics can help keep some clients’ premiums low due to risk-reduction actions, while other clients will have little choice but to pay higher rates.

The opportunity for brokers

You should be communicating openly with your clients now regarding the chance of rising premiums. Because higher premiums could be received as bad news, it’s important for you to explain what’s going on in the market, what’s driving the changes, and how clients can deal with them.

Stay up to date with market changes so you can advise your clients effectively. Quality advice, combined with excellent placements and programs, will add value to your clients: start working with them to demonstrate that value now.

As an Austbrokers partner, you have access to market-leading insights and advice. We can work together to help your clients manage their risk optimally. To find out more, contact us today.

How to choose the right partnership model for your business

If you’re thinking about growing your business, a partnership may be on the cards. It can be a useful way to increase your business’s reach beyond what would have been possible alone. After all, partnering with the right organisation can give your small business access to more resources, including access to infrastructure and operational assistance, technology, support, marketing, human resources, and other back-office functions. It can also let you take advantage of economies of scale.

But partnering with another person or organisation is a big commitment and it’s important to think carefully about all aspects before signing on the dotted line.

For example, what kind of partnership model is right for your business? There are four basic types of partnership:

  1. Equal. An equal, general partnership is where every partner, regardless of how many there are, is equally responsible for the business, including its operations, its profits, and its debt.
  2. Limited. Where one partner invests less than another, the result is an unequal partnership, or one where that partner has only limited obligations. This is usually calculated according to the amount they’ve invested. It can be a low-risk way for one party to explore what it’s like to work with the other.
  3. Silent. Sometimes, an investor is willing to provide capital and receive dividends without having any say in how the business is run. This is often referred to as a silent partner.
  4. Equity. In this model, each party retains some equity or ownership of the business and its earnings. The equity doesn’t have to be equal, since each partner’s equity is calculated based on their contribution to the business. This contribution can be in the form of capital or services, which is often known as sweat equity.

Choosing the right model depends on a lot of factors and you should seek professional advice before making a final decision. Some of the things you should consider include how each party wants to manage decision-making, how much capital each party will contribute, and whether any of the parties are likely to want to exit the agreement, for example, once a specific objective is achieved.

For business partnerships to work, all parties need to be committed and share compatible cultures and goals. You should do exhaustive research as part of your due diligence to find out as much as possible about your prospective partners before committing. This will help avoid a messy situation later if the partnership turns out to be a mistake.

AUB Group has run an owner-driver, equity-based partnership model for the past 30 years. It lets owners retain control over daily operations while they leverage the Group’s collective resources. This is the perfect model for our business and our partners, because it lets us complement each other’s strengths and achieve strong growth together. We both have skin in the game so we work proactively to drive growth; we have no interest in being passive shareholders.

AUB Group is a proactive partner that strives to help partners grow. We both have skin in the game, taking equal responsibility for the business’s success. We have no interest in being passive shareholders; our goal is to build partnerships with people and businesses that are likeminded, ambitious, and hungry for growth. To achieve this, we can’t be a passive investor. Instead, we take a collaborative approach that treats each partner according to their unique needs.

Based on 30 years of partnering, AUB Group has identified five key traits for a successful partnership:

  1. Shared vision, goals, and expectations.
  2. Trust between all parties.
  3. A similar or complimentary culture.
  4. Complementary strengths that let each party support the other.
  5. Adaptability and flexibility to embrace the inevitable changes in business.