Austbrokers will continue its strategy of growth through acquisition, with about $20 million available for purchases, according to outgoing CEO Lach McKeough.

“Since the end of the financial year three bolt-on acquisitions have been made and we are continuing discussions in relation to a number of [others],” he told the group’s AGM last week.

Mr McKeough predicts moderate rate increases in the SME market this financial year.

“Austbrokers is also experiencing rate rises in private motor and home insurance, with greater increases in higher-risk or poor-claims-record business. Professional indemnity and directors’ and officers’ rates remain soft,” Mr McKeough said.

This financial year Austbrokers companies Strathearn and MGA bought portions of PB Insurance in Caboolture, while MGA also acquired the Wymark Sirius portfolio in Darwin.

RWA – 60% owned by Austbrokers – has bought Special One Financial Services in Walgett.

The broker group has also increased its equity in Insurics from 50% to 100%, in Austbrokers Canberra from 75% to 85%, in Adroit from 50% to 68.5% and Comsure from 50% to 80%.

Underwriting agency joint ventures established since June 30 are Angel Accident and Health, the Longitude strata business and One Liability Underwriting.

Mr McKeough says results for the four months to the end of October are “pleasing” but most profits are earned in the second half, and “the level of profit commissions will not be known until the last quarter”. Previous guidance of 5-10% net profit growth remains in place.

Falling interest rates will hit earnings but this will be partly offset by additional equity from acquisitions.

In August Austbrokers entered a new arrangement with Hunter Premium Funding, following six years with Pacific Premium Funding.

Synergies are being achieved through the centralisation of data management in 33 businesses and back-office services being rolled out to 19 of the group’s operations.

In 2011/12 broker revenue was up 12.5% to $252.68 million, while pre-tax profit grew 9.7% to $42.85 million.

Mr McKeough will step down in January, to be replaced by Mark Searles. However, he will be retained as a consultant to work on acquisitions.