Austbrokers has ended a six-year premium funding relationship with Pacific Premium Funding and signed a five-year deal with Allianz-owned Hunter Premium Funding.

The deal came into effect last week.

Austbrokers Group Services Manager Frank Gualtieri says the deal was struck after the most recent three-year premium funding contract with Pacific expired and the contract was put out to tender.

“We had a very happy and sound relationship with Pacific, but premium funding now features very strongly in our annual results, and to do the best by our shareholders and network partners we had to see what was out there,” Mr Gualtieri told insuranceNEWS.com.au.

He says the Hunter deal was the most attractive offer in the market, “and gives Austbrokers the opportunity to build on a very strong income structure”.

Austbrokers did not release details of the size of the new premium funding deal, but Mr Gualtieri says last year’s arrangement was worth $16 million. 

Funding terms are under some pressure because of capital shortages in Europe, but Mr Gualtieri says Austbrokers “will not have an increase in rates. The Hunter relationship will be accretive for us.”

Allianz Broking & Agency Chief GM Jonathan Poole says Allianz has enjoyed a strong relationship with Austbrokers over a long period. “The appointment of Hunter as their preferred premium funder will further strengthen our relationship.”

The premium funding market in Australia is growing strongly and is estimated to have doubled since 2000 to around $5 billion annually. Funders typically cover 35-40% of premium income from insurance portfolios.