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360 Construction agrees to buy Ensurance Underwriting

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Underwriting agency 360 Construction and Engineering has agreed to buy Ensurance Underwriting for $1.1 million, it was announced today.

Products offered by Ensurance Underwriting include latent defects, owner builder and trades liability. An additional payment agreed to by 360 is dependent on the income from the latent defects product over the coming year.

360 Underwriting Solutions was set up in 2017 by former senior Allianz executives Denis Morrissey and Chris Lynch.

Last year 360 acquired a 50% stake in online insurance underwriting agency eSentry, adding construction capability to its rapidly expanding portfolio. 360 moved into agriculture in June with a majority stake in specialist rural agency Insure That. It is also active in cyber, commercial, aviation, accident & health and commercial motor lines.

Earlier this month, Ensurance revealed talks were at “advanced stages” regarding the sale of its Australia-focused underwriting arm. The listed insurance agency presented Ensurance Underwriting as a “discontinued operation” in its half-year earnings report.

Ensurance Underwriting provides intermediaries with “fast, simple, reliable and comprehensible” construction insurance via its customised online platform.

Ensurance Executive Chairman Tony Leibowitz says the sale is “a significant milestone”.

“Over the past 22 months significant work has been completed to divest non-core operations, reduce corporate overheads, refine our global growth strategy and develop and grow our UK operations. Already we have seen strong quarter on quarter growth from our UK operations,” he said in an ASX statement today.

Ensurance is now focused on the UK market, where significant investments have been made to build its presence. The UK business offers about nine products, including from security provided through partners such as Lloyd’s, Swiss Re and Axa XL.

It performed strongly in the December half, with gross written premium up 296% to £7.7 million ($15.19 million).

The company announced in May 2018 it would restructure to reduce IT and administration costs from its Australian operations. After the sale, Ensurance operations will consist of a UK base supported by a much smaller Australian corporate head office.

“The restructuring further frees up management’s time and capital to support the rapid growth and continued development of Ensurance’s growing UK business,” it said today.

Ensurance maintains the business is on the right track, despite posting an overall first-half net loss of $2.02 million. It says the cost-saving measures undertaken over the past two years, including the disposal of its non-core Australian brokerage business, have placed the company on a “clear path to positive cashflows.”