The Steadfast prospectus, launched on Friday afternoon, has already filled a few newspaper pages, and will fill many more before its likely emergence in August as a listed entity with a mixture of broker ownership levels.

There’s a great deal of information in the prospectus, and finding the details that are of immediate interest to an insurance-oriented readership is challenging.

The prospectus exudes confidence in the future of the company, but is also required to nominate factors that might change its forecasts.

For example, what would happen if there are changes in the regulations governing the way general insurance brokers are paid?

While CEO Robert Kelly pointed out to a media briefing this morning that the commissions versus fees debate is focused on investments and financial planners, the prospectus admits revenue would be impacted if changes were forced on brokers.

“To the extent that Steadfast is unable to successfully manage the transition to a new remuneration model on equal or better terms, this may have an adverse impact on the revenue generated by Steadfast Network Brokers,” it says.

“This in turn could have an adverse impact on the revenue and earnings of Steadfast and its future profitability.”

The prospectus also warns any expansion of the Future of Financial Advice reforms, especially conflicted remuneration, into general insurance could impact on Steadfast

“Any changes required to the remuneration and business model of Steadfast Network Brokers may result in a material loss of revenue for the broker,” the prospectus says.

This would be a significant problem if the broker could not reduce fixed costs or pass them on to the customer.

“This may have a material adverse impact on Steadfast’s revenue, earnings and future profitability,” the prospectus warns.

Although the company has been keen to separate itself from last month’s float of iSelect, the share price of which has plummeted well below its initial price and stayed there, Steadfast is keen to be compared with rival broker group – and sharemarket darling – Austbrokers.

However, Austbrokers owns around half of each of its 46 member companies and the Steadfast ownership pattern is more varied.

As Mr Kelly noted this morning, some Steadfast member companies that have not sold a share into the company may well choose in the future to sell into another group, just as non-members may be acquired by Steadfast.

Rapid change in allegiances will become more apparent over the next year as brokers consider the sellers’ market that has developed. Mr Kelly makes no bones about Steadfast’s ongoing appetite for acquisitions of member and non-member companies, while Austbrokers, IBNA and even Insight – whose “small is good” model might suit smaller Steadfast members facing life in a hub – are also in the hunt.

As one CEO noted to insuranceNEWS.com.au today, the broker scene at present is “a bit like a key party, with plenty of surprises on who’s going home with who”.

The Steadfast prospectus demonstrates this by listing some previously unannounced acquisitions. For example, it will buy 100% of National Credit Insurance Brokers, a wholly owned subsidiary of QBE Insurance. It also now owns previously non-aligned Queensland broker PI Direct.

And it is also buying 49% of mid-sized Sydney broker – and IBNA member – Scott & Broad.

Austbrokers returned fire this morning by announcing it has bought a 50% share of a Steadfast member, Parramatta-based WRI Insurance Brokers. That deal brings Austbrokers’ tally of partner businesses to 46, and follows the acquisition last month of prominent Steadfast member InterRISK Australia. 

Below is the list of Steadfast purchases completed before the initial public offering (IPO) and those that have been agreed on for after the IPO is completed:

Pre-IPO acquisitions:

• 100% of DMA Insurance Brokers and Wagland Salter & Associates, both in NSW 
• 100% of Newmarket Insurance Brokers, SA
• 17.9% of C&G Rothbury Group in New Zealand, (with another 12.1% to be bought post-IPO)
• 80% of underwriting agency Sports Underwriting.

Post-IPO acquisitions:

The following lists are arranged in order of what the prospectus calls “materiality based on purchase consideration”:

100%:

• National Credit Insurance Brokers, NSW
• PI Direct, Qld
• Saunders Higgins Insurance Brokers, Tas
• ED’A Insurance Services, WA (but expected to contract to 49% over time)
• Sawtell & Salisbury, Qld
• Insurance Broking Queensland, Qld
• Gallivan Magee & Associates, Vic
• Masterman Insurance Brokers, Vic
• Grand West, SA
• Australian Underwriting Group (Cyclecover), Vic.

Controlling shareholding (50-99%):

• Regional Insurance Brokers, Qld, 90% (may reduce to 74% over time)
• Mega Capital, Vic, 80%
• Brecknock Insurance Brokers, SA, 72.5%
• GWS Network Insurance Brokers, Vic, 80%
• CentreWest Insurance Brokers, WA, 80% (but expected to contract to 49% over time)
• Professional Risk Placements, WA, 80%
• Corporate Insurance Brokers, Qld, 80%
• Logan Group Insurance Brokers, Tas, 80%
• Queensland Insurance Brokers, Qld, 80%
• Finserv Solutions, NSW, 50%.

49% of:

• Indemnity Corporation, NSW (see news article)
• Austcover, Qld
• McKillops Insurance Brokers, Tas
• Consolidated Insurance Agencies, Vic
• Garaty Murnane Insurance Brokers, NSW
• Pollard, Vic
• Northern City Insurance Brokers, Qld
• Fenton Green, Vic
• Finn Foster, NSW (see news article)
• NCA Insurance Services, Qld
• King Insurance Brokers, Vic
• RSM Insurance Brokers, Vic
• Commercial Industrial Insurance Consultants, Vic
• Gardner Insurance Brokers, Qld
• Covercorp, Qld
• Melbourne Insurance Brokers, Vic
• Scott & Broad, NSW
• Rose Stanton Insurance Brokers, NSW
• Blackburn Insurance Brokers, Vic
• MFP Insurance Brokers, SA
• Southside Insurance Brokers, NSW
• Finpac Insurance Advisors, Qld.

Less than 49%:

• C&G Rothbury, NZ, total shareholding to be 30%
• Phoenix Insurance Brokers, WA, 46%
• Lanyon Partners, Vic, 45%
• Johansen Insurance Brokers, Vic, 48%
• Edgewise Insurance Brokers, Vic, 25%
• ANCA Insurance Brokers, Tas, 44%
• IPS Insurance Brokers, WA, 40%
• Watkins Taylor Stone Insurance Brokers, NSW, 35%
• Tudor Insurance Brokers, Tas, 48%
• Armbro Insurance Brokers, Vic, 40%
• Dunk Insurance, NSW, 25%
• Optimus 1, Queensland, 25%
• Paramount Insurance Brokers, Vic, 25%
• Empire Insurance Services (trading as McLardy McShane) Vic, 37%
• Armstrongs Insurance Brokers, Tas, 25%
• Denboer & Associates, WA, 25%
• Hervey Bay Maryborough Insurance Brokers, Qld, 47%.

Underwriting Agencies:

• Miramar Underwriting Agency, NSW, 100%
• Sterling Insurance, NSW, 39.5%
• Altiora Insurance Solutions, NSW, 100%.

Ancillary businesses:

• White Outsourcing, NSW, 87.5%
• Meridian Lawyers, NSW, 25%.