Austbrokers’ recent push into the New Zealand broking market heralds the beginning of a trans-Tasman expansion strategy that is likely to bring further acquisitions next year.

As reported in insuranceNEWS.com.au last week, Austbrokers has acquired 100% of the BrokerWeb Management (BWM) cluster group and 50% of New Zealand’s largest independent brokerage, BrokerWeb Risk Services (BWRS).

Austbrokers entered the New Zealand market in 2006 – one year after it listed on the Australian Securities Exchange – through its joint venture with Insurance Advisernet NZ, which has 32 authorised representatives and $70 million in gross written premium (GWP).

Austbrokers spent more than $26 million on acquisitions last financial year, and CEO Mark Searles says New Zealand offers more opportunities.

“Our operations in New Zealand provide pipeline opportunities for future equity partnerships,” he told insuranceNEWS.com.au.

“With our New Zealand partners we will continue to look for opportunities across our three market-facing areas of business: insurance broking, underwriting agencies and risk services.”

Mr Searles says Austbrokers’ owner-driver model translates “particularly well” to New Zealand, and this will be the favoured expansion model, including acquisitions. “We have a highly evolved business model that we’d like to utilise with potential partners in New Zealand.”

Under the owner-driver model, Austbrokers partners with shareholder principals of operating businesses and provides back-office services “at cost”.

BWM has 40 broker members and BWRS has six branches.

The $NZ20 million ($18.15 million) acquisition was conducted through NZ Brokers Holdings, which is 80% owned by Austbrokers and 20% owned by the group’s Chief Broking Officer Keith McIvor.

Mr McIvor will oversee Austbrokers’ New Zealand operations from Australia.

BWRS CEO David Archer and BWM CEO Jim Harris will remain in their current roles and lead the daily business operations. The businesses will trade under their current brands.

Mr Searles says expansion – in Australia or New Zealand – will not necessarily come through acquisitions.

Austbrokers will also consider start-ups in the underwriting agency and risk services segments.

He notes the underwriting agency division Austagencies increased its earnings by 33% last year, and 40% of the growth came from start-ups using the owner-driver model.

“If we can find the right underwriter to employ, then we build a business.”

Austbrokers says the New Zealand acquisitions have a combined GWP of $350 million and about 120,000 clients.

At Austbroker’s AGM last week, Mr Searles described the company as “a leading light in the insurance broking industry”.

“We have come a long way since listing nine years ago… when we were a third of the size we are today,” he said.

“Our extensive Australian broking interests mean we are the largest equity-based broking group in Australia.”

Austbrokers has a group GWP of $2.3 billion with 450,000 clients in Australia and New Zealand. The company reported an underlying net profit of $35.5 million in 2013/14.