AUB Group’s first-half underlying earnings increased 13% to $79.3 million, driven by UK and Australian acquisitions and growth in existing businesses.

Revenue rose 12.1% to $712.6 million, with gains across Australia and New Zealand broking, agencies, Bizcover and the international division.

CEO Michael Emmett says AUB is building a multinational insurance services group. 

“Although we are still in the early stages of replicating our successful Australian model internationally, we now have a diverse set of strategic levers to drive revenue, margin expansion and sustained earnings growth for AUB Group shareholders,” he said.

Australian broking pre-tax profit increased 11.5% to $65.9 million, supported by organic and bolt-on acquisition growth.

“There have been several questions around softening premium rates,” Mr Emmett said at a briefing.

“While we have observed this trend in certain risk classes, I’d like to highlight that in Australia, our overall income per customer grew by 9.2% during this period and also that an increase in broker fee rates has partially offset any impact of slowing premium rate increases.”

New Zealand broking earnings rose 11.6% to $12.2 million as expanded teams won more new business, and BizCover gained 28.5% to $8.6 million. 

Agencies pre-tax profit rose 32.3% to $32.9 million, including the Pacific Indemnity acquisition, and Mr Emmett said the UK-based Tysers wholesale business, which AUB acquired in 2022, is playing a significant role in assisting agencies.

Pre-tax profit for the international division, which contains Tysers, UK retail and managing general agencies, fell 20% to $30.5 million, including a one-off drag from aligning bonus periods and impacts from teams formerly part of the operation.

On a normalised basis, international earnings increased 18.2% to $38.6 million, including investments in UK retail businesses Momentum and Movo.

Mr Emmett says Tysers’ organic growth has been better than forecast and it is bringing wider benefits to the group, while other acquisitions are also contributing.  

“We are very pleased about the performance across the whole group, including international. We’ve done an extraordinary amount of heavy lifting in a short period of time, the business is really well positioned for the future and it’s performing well already.”

Mr Emmett says the company continues to consider acquisitions where it sees opportunities, including in New Zealand broking and Australian agencies. In the international division, UK bolt-on retail broking, specialty areas such as marine and expanding into UK agencies are also on the radar. 

“The nice thing is [there’s] still a big expanse of areas that we’d like to invest in and that will keep us busy for a number of years.” 

Mr Emmett is positive on the outlook for premium rates, seeing growth generally in the 5%-10% range, apart from a few classes to which AUB is not too exposed.

He says the volatile geopolitical environment and severe weather risks are positive for brokers.

“I’ve said that I believe premium rates will go up for the rest of my lifetime, and I think that remains my categoric view,” he said.

Statutory reported net profit fell to $26.4 million from $53.1 million, including contingent consideration changes.

The company says it has reached agreement with Odyssey Investment Partners for a final earnout payment for Tysers of £57.4 million ($114 million), to be paid next month.

AUB has reaffirmed full-year guidance for underlying net profit of $190-$200 million.

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