Wesfarmers Insurance is moving to a single licensed entity for its Australian businesses, but it doesn’t mean Lumley and Wesfarmers Federation Insurance (WFI) are being merged.

The move to a single licence, announced at a Wesfarmers briefing last week, is mainly intended to increase capital efficiency and “leverage combined capabilities”. 

Spokesman Robert Swinton says that in terms of the way Lumley and WFI engage with their respective markets and customers, nothing will change.”
The group has also moved to “ringfence” its credit rating from the parent company  which will allow the insurance business to be rated independently from the parent company, with Wesfarmers Insurance maintaining its A- credit rating.
Wesfarmers Insurance CEO Rob Scott told the briefing WFI will focus on expanding its distribution network and improving its conversion rates from referrals.

He says Lumley Australia will implement tighter underwriting controls, including increasing its rates in underperforming classes.  Lumley NZ will continue to concentrate on improving its underwriting and cost efficiency.
Wesfarmers Insurance also plans to focus on portfolio management. “We see portfolio management as an ongoing process of ensuring we are adopting appropriate pricing of risks while meeting the expectations of clients across different classes of insurance,” Mr Scott said.

The brokerage businesses, OAMPS in Australia and Crombie Lockwood in NZ, will focus on bolt-on acquisitions, leveraging their combined broking capabilities and upgrading broker sales performances.

Wesfarmers Insurance is now the third-largest broker in Australia and the fifth-largest underwriter in the Australian and NZ markets.