Calliden Group will transfer its farm portfolio to Munich Re subsidiary Great Lakes Australia (GLA) but says customers won’t be affected by the change.

From January 1 next year, Calliden will cease underwriting new farm policies for Melbourne-based subsidiary ARGIS, with policyholders to be offered a new package underwritten by Great Lakes Australia once their current policy expires.

Calliden’s farm book will join the company’s former commercial package business at GLA, which was signed over in December last year under a three-year agreement.

The company is moving from being a pure underwriter to a hybrid managing general agent (MGA) model, where the group’s future revenue from commercial packages will be commission-based.

Group Executive, Customers Mike Hooton told insuranceNEWS.com.au the move gives clients access to GLA’s Standard & Poor’s AA- rated security, besides continued access to the dedicated Farm Centre and other online tools and service.

“We agreed to transfer our commercial package business to GLA from May this year so the next logical step was farm,” he said.

“We think the introduction of Great Lakes paper will encourage more brokers to deal with us and deliver larger farming portfolios.”

The farm portfolio accounts for 10% of Calliden’s annualised gross written premium and is distributed by ARGIS through intermediaries.

Calliden and GLA are also planning to expand their commercial package to the mid-market sector next year. When combined with the farm portfolio transfer, about 30% of Calliden’s premium will soon be written on behalf of GLA.

By the beginning of next year, Calliden says about half of the group’s total premium will be outsourced to either GLA, Lloyd’s or – in the case of statutory insurance – the NSW Government.