IAG sees great scope to expand through the takeover of Lumley New Zealand, IAG NZ CEO Jacki Johnson says.

New Zealand brokers last week condemned the Commerce Commission’s decision not to oppose the takeover, while other groups, including Suncorp and smash repairers, opposed the takeover because of the level of market dominance it will give IAG.

But Ms Johnson says both Lumley and IAG’s intermediated business NZI “have well-established competitors in New Zealand and our view has always been that the increment to IAG’s personal and commercial lines business from the transaction will not substantially lessen competition”.

“Lumley in New Zealand has complementary strengths to our existing NZI business and I see a tremendous opportunity for us to build on these strengths to broaden our offering to our customers and partners,” she said.

The commission ruled the acquisition will not reduce competition for personal or commercial lines.

Insurance Brokers Association of New Zealand CEO Gary Young says the commission failed to address the dominance IAG will gain in the domestic market, or competition and capacity issues for brokers and their clients.

“We didn’t believe it would go through without conditions attached,” he told insuranceNEWS.com.au.

He says brokers are concerned the market will become a duopoly of IAG and Vero, and IAG will cover more than half New Zealand’s insured assets.

IAG MD Mike Wilkins says the commission’s decision is a “significant step” towards completing the acquisition of Wesfarmers’ underwriting businesses, which was announced last December.