So-called challenger brand Hollard is closing in on its ambition to write $1 billion in premium, thanks to another major acquisition.

The South African insurer was licensed in Australia in 2002, and the past 15 years have been a remarkable growth story for CEO Richard Enthoven.

From humble beginnings, it now writes about $700 million in annual premium and has more than 1 million policyholders and 500 staff.

Mr Enthoven has his sights set on the milestone of $1 billion in premium, and last week’s acquisition of SME specialist Calibre Commercial Insurance brings that a step closer.

Hollard is a diversified operation, but most of its business has been in direct personal lines.

However, the Calibre acquisition will see a renewed focus on the intermediated SME sector.

Calibre, which has 80 staff and bases in Sydney and Melbourne, has experienced little stability in its short history.

Munich Re purchased Calliden’s general insurance operations in 2014 and the rebranded Calibre operation was launched the following year. But less than a year later, following a strategic review, Munich Re announced it would look to sell its primary insurance operations in Australia, including Calibre.

Some 14 months on, Hollard has emerged as the new owner, and Mr Enthoven believes it is a significant step in his company’s development.

“We had a desire to have a much more substantial presence in the SME space, and this is a material step forward for us,” he told insuranceNEWS.com.au. “In Australia and New Zealand we have a rapidly growing but small SME presence, but the time is right now to take a quantum step forward in that market.”

Calibre brings new skills and capabilities, but will remain a standalone business, Mr Enthoven says.

It effectively doubles Hollard’s presence in the SME market.

“I am certain the Calibre team will be delighted the acquisition is completed and they have a home in the Hollard stable,” Mr Enthoven says.

“We have sent a very clear signal that we intend to bring the same kind of aspirational mindset to SME that we did with personal lines.

“We are not far away from $1 billion in premium and this acquisition takes us a step closer.”

Calibre CEO Mike Hooton is an experienced player in the local market, and has gained plenty of admirers for keeping Calibre operating positively and nursing it along even as speculation floated about its future. He told insuranceNEWS.com.au Hollard is a good cultural fit.

“We have a robust business and brokers have continued to support us during this period of uncertainty,” he says. “But we can now focus 100% on what we do best, which is delivering good insurance.

“Hollard is a like-minded organisation that has extensive expertise in dealing with managing general agents and brokers.

“It understands our business and supports our philosophy. It has grown quite considerably over the past few years and is a significant player in the general insurance market.”

Hollard appears to be making a habit of acquiring companies that have considerable growth potential but have lacked the wherewithal to make a greater impact in their niches.

For example, in March it bought the Australian motor portfolio of Progressive Direct, adding $40 million in annual premium and allowing the giant US insurer to quit the local market.

No one expects the Calibre acquisition to be the end of Hollard’s steady growth.

“We have shown a willingness to grow inorganically as well as organically, and if other opportunities present themselves we will certainly look to take them,” Mr Enthoven said.