The Australian Prudential Regulation Authority has granted Australian-owned AssetInsure – which bought the business of Gerling Global Reinsurance – a general insurance licence.

AssetInsure CEO Peter Wedgwood says the company will position itself as a specialist insurer and focus on professional indemnity, financial risks, property and engineering insurance.

“The granting of the licence to AssetInsure should herald the end of a negative phase in the Australian insurance cycle,” he said. “After the collapse of HIH and the departure of a number of foreign-owned insurers, the Australian market has not been in a position to fully absorb the demand for certain type of cover.”

AssetInsure’s major shareholders are Babcock & Brown and Asset Underwriting, but it also has some famous players on its list. Former NSW Premier and Federal Minister for Finance John Fahey is the group’s Chairman.

Mr Wedgwood says the group – which has assets of approximately $300 million – is “a well capitalised insurer, capable of providing much-needed capacity immediately”. He says the group hopes to provide an alternative to customers who obtain insurance from offshore where levels of service “are not as high as Australian clients might expect”.

“Our presence will be welcomed by the corporate and professional markets, particularly in the professional indemnity sector where there is a short supply of alternatives. For the past few years it has concerned the market that more than 50% of PI risks go into the London market.”