Steadfast has expanded into the US insurance market with the $US55 million ($86 million) acquisition of independent insurance broker network ISU Group. 

The move comes after Steadfast previously flagged plans to look at opportunities in the market. 

The South Carolina-based ISU network has more than 220 members located across 40 states and has partnerships with over 75 insurance carriers and wholesalers. 

CEO Robert Kelly says Steadfast has been investigating options to expand in the US over the past five years, with a more concerted effort over the past 18 months. It selected ISU after narrowing the field. 

“Expansion into the US market will provide Steadfast with a compelling runway of opportunities to maximise growth and deliver our strategy and unique business model to the world’s largest insurance market,” he said.  

Morningstar analysts say the fragmented US market presents good opportunities for Steadfast to make more acquisitions and to grow market share by attracting members of other networks. 

“This is unlikely to be the last acquisition Steadfast makes in the US, but given the timing and size are unknown, we have not made any explicit assumptions,” they say in a research note. 

“We think the approach is logical. We like that this is a small acquisition, giving Steadfast a foothold to better understand the market and opportunities without putting material capital at risk.” 

Mr Kelly told insuranceNEWS.com.au there are opportunities for acquisition growth within the ISU network, which has expanded as a privately owned business, and there’s a good cultural fit between the two organisations. 

Steadfast introduced its equity acquisition program before it listed. It was especially popular with members who were seeking to sell but had no buyer in prospect. ISU today is in a similar position because of the lack of a succession program, he says. 

“We’ll be able to provide that now to that network, and we’ll also have the ability to look at bringing our software into the US market via our own network,” he said. 

“It’s a toe in the water for us and allows us to not bet the farm on what we’re doing, and gives us the opportunity to prove that what we are doing will be very fruitful, in terms of rolling out a lot of the services and things that have made Steadfast great.” 

Part of Steadfast’s work on US opportunities has involved looking at the potential to monetise its software system in larger markets. 

Mr Kelly is currently Chairman of the US-based insurance data standards body the Association for Cooperative Operations Research and Development (ACORD) and says he has built up knowledge of the US market over the past 14 years. 

ISU Group CEO TJ Ryan says it’s an “exciting new chapter” in the firm’s history. 

“We have taken a long-term view of ISU’s future and are highly confident this partnership with Steadfast will provide ISU’s independent agents with an even greater competitive edge in an ever-changing market.”