New Zealand consumers will have access to more capacity following Rothbury Insurance Brokers’ decision to become the country’s founding member of Australian-based broker group Steadfast.

The Canterbury earthquakes have made “well-priced insurance cover” harder to get, and Rothbury decided it needed an international partner, MD Roger Abel says.

Directors looked at possibilities in Singapore, London and Australia before deciding Steadfast was the best fit.

As reported by insuranceNEWS.com.au in a Breaking News bulletin last Wednesday, Steadfast will acquire a 30% cornerstone shareholding in Rothbury, comprising 17% cash and 13% Steadfast shares. The deal is conditional on Steadfast proceeding with its plans to list later this year.

Insurers have grown more selective about New Zealand risk following the Canterbury event, and brokers face problems advocating for clients when capacity and pricing are challenged, Mr Abel says.

One Wellington client that paid $NZ400,000 ($327,000) for insurance in 2011 faced a bill for $NZ2 million ($1.64 million) last year.

“The options become very limited,” Mr Abel told insuranceNEWS.com.au.

The tie-up will give Rothbury more choice in a market with tight capacity, according to Insurance Brokers Association of New Zealand CEO Gary Young.

Local broker clusters will not be weakened because they are a better fit for small and medium brokers than for a company the size of Rothbury, which is the fourth-largest in the market, he says.

Rothbury aims to open more offices and increase its staff from 190 to 300 by 2017.