Allianz Australia has taken major stakes in specialist crop underwriting agencies Agricola Underwriting Management and Primacy Underwriting Agency as part of a global push into crop insurance lines.

Under the terms of the local deals, Allianz will take a 60% stake in Agricola, extending to 100% within five years. This will end the existing underwriting agreement between Agricola and Lumley, but another agreement with Elders Insurance is expected to continue.

The size of the Allianz stake in Primacy Underwriting Agency has not been disclosed. The agency covers a very similar book of business to Agricola.

Allianz has close links to Primacy, having operated an underwriting agreement with it for 10 years.

While the loss of the Agricola portfolio is not expected to materially affect Lumley operations, spokesmen for Allianz and Lumley declined to comment when approached by insuranceNEWS.com.au.

Agricola claims to be the largest crop and forestry insurance provider in Australia and New Zealand, covering broadacre, cotton, forestry, greenhouse, orchard and viticulture risks.

MD Bernie Mayers, who is expected to stay on in the role, says the outlook for the sector is “bullish”.

“Generally, seasonal conditions are looking good across most of the country,” he told insuranceNEWS.com.au on Friday.

Primacy MD Steven Green believes both Agricola and Primacy will continue to operate as separate entities, dousing speculation Allianz may look to combine the agencies.

“Allianz doesn’t own 100% of either business,” Mr Green told insuranceNEWS.com.au. “With independent shareholders involved it’s not easy within that structure to put everything together, or control what entities do.”

He says the Allianz investment is likely to open up opportunities within the rural Australian market.

“It takes the resources of an Allianz or QBE who are prepared to invest to develop a particular market,” he said. “While agencies do the best they can, they don’t always have the finances to make those significant investments.”