Major broker group Austbrokers expects premium increases in the SME sector and is already seeing significant rises in domestic classes, CEO Lach McKeough told last week’s AGM.

He says the broker market will continue to consolidate in 2012, providing opportunities for Austbrokers, which has $20 million available for acquisitions.

“There is also increased competition emerging for acquisitions,” he said.

Mr McKeough says Austbrokers’ earnings for the first four months to October 31 were “pleasing” but 40% of the group’s profit is earned in the last two months of the financial year.

The group maintained its previous earnings guidance of a 5-10% increase in net profit after tax this financial year.

While there had been rate increases in the personal and SME sectors this year, Mr McKeough said professional indemnity and directors’ and officers’ insurance rates remain soft due to excess capacity.

“Underwriters have generally continued their push for rates to increase, particularly after the floods and Cyclone Yasi,” he said. “Risks with any degree of higher exposure have moved into the hard-to-place markets.

“Rates on risks in North Queensland have increased substantially and many underwriters are reducing their exposure to this region.”

The 13 brokerage acquisitions made last financial year have added over $3 million income to the group. It has also had made two more “bolt-on” acquisitions this financial year “and we are continuing discussions in relation to a number of further acquisitions of portfolios and businesses”.

Mr McKeough says Zurich and Vero are expected to join the iClose system next year and an industrial special risks package will be added in coming weeks.

The system is being rolled out across the Austbrokers network. He says iClose will give brokers a competitive advantage and deliver significant benefits to customers and insurers.