IAG subsidiary CGU has entered the NSW and Victorian home warranty markets, boosting competition and availability in the once ailing sector.

Following talks with the Office of Fair Trading and the Australian building industry, the group says it will initially limit cover to small builders, but look into expanding its reach to larger builders in the future.

IAG Deputy CEO Ian Brown says the group first began looking into the home warranty market following Sydney’s 2002 bushfires. “A number of our customer whose homes were destroyed or destroyed or damaged had great difficulty in finding a builder,” he said. “A significant contributing factor to this problem was the difficulties builders were experiencing in sources home warranty insurance following the collapse of HIH.”

He says the company is contemplating expanding into the sector in other states.