Hollard’s acquisition of US insurer Progressive Direct’s Australian motor business marks a significant expansion, CEO Richard Enthoven says.

As reported in a Breaking News bulletin on Wednesday, the deal is expected to be completed in the fourth quarter of this year.

Mr Enthoven told insuranceNEWS.com.au the acquisition will add $40 million to Hollard’s annual premium.

Before the deal his company expected to write $660 million in premium this financial year.

“It is a significant expansion of our motor portfolio in our quest for scale,” he said. “We have made a handful of bolt-on acquisitions previously, but this would be the largest.

“Progressive has a really pleasing track record of innovation and there is plenty we can learn from it.”

Mr Enthoven believes Hollard is “a few years away” from hitting $1 billion in premium, and further acquisitions are on the cards.

“We are a deeply entrenched top 10 insurer in Australia now,” he said. “We are always on the lookout for opportunities that fall within our risk appetite.”

Ohio-based Progressive Direct, one of the world’s largest vehicle insurers, made its first move into the global market in December 2009 when it moved into Australia, saying its “low-cost, price-competitive online sales/claims model” would suit the local market.

PD Insurance Agency – a company created and partly owned by Hollard and Progressive’s Australian Country Manager Simon Lindsay “and others” – will be the authorised agent servicing Progressive’s Australian policies until the transfer to Hollard, and will start operating this Friday.

The agreement allows Hollard and PD Insurance Agency rights to use the Progressive brand in connection with car insurance in Australia until late 2019.