The potential big deals in the local market are too expensive for QBE’s taste, but that hasn’t stopped the company thinking laterally to take a strategic 14.9% stake in Austbrokers Holdings Limited.

Group CEO Frank O’Halloran says the purchase will form part of the insurer’s strategic holdings but does not represent the early stages of an acquisition.

“It is long term and friendly to the Austbrokers board,” he said. “It is not our intention under existing circumstances to make a takeover offer.”

Austbrokers Holdings Company Secretary Steve Rouvray told Sunrise Exchange News the acquisition will not affect the independent general insurance broker network.

He says the 14.9% stake most likely indicates QBE’s keenness to become involved with Austbrokers. “It shows that QBE Insurance is keen for Austbrokers to remain as an independent group in Australia – which is great.”

The move also gives QBE a measure of strength as the deals and counter-deals between the three main clusters – Steadfast, Austbrokers and IBNA – continue. There is a great deal of movement taking place, with the remaining significant independent brokerages coming under pressure to sell or get involved in relationships.

Austbrokers this month bought 50% of Brisbane brokerage DF McGarry and Associates.  

QBE has spent $3.5 billion so far this year on two acquisitions in the US that will result in 40% of its premium being derived from the Americas. Mr O’Halloran says the company will continue looking for acquisitions in Latin America.