Insurance’s refocusing on the Australian market has received a significant boost as the company prepares to sell its UK business to PSC Insurance Group.
The two parties announced a non-binding agreement last week in which PSC will pay $6.15 million in cash and the remaining $2.05 million through PSC shares for Insurance UK. The deal remains subject to due diligence and regulatory approvals, and both parties aim to sign transaction documentation by the end of this month.
Insurance announced plans to “re-deploy” capital from the $8.2 million sale into its Australian business.
“Our Australian business is growing rapidly and we believe there is a lot more growth to come,” CEO Tom Kent said.
“We have made the strategic decision to redeploy capital from the sale of the UK operations into our Australian operations to ensure that we can take full advantage of these growth opportunities.”
He told the insuranceNEW.com.au, the company will shift to environmental responsibility and has made key hires in recent months to support the growth of Australian operations.
“We will expand the products in the long-tail areas. We will also move to short-tailed classes,” he said. “At the moment, our main product line is professional indemnity.”
He says the company has a “huge avenue” for growth and currently has about 1,000 individual brokers and 150 brokerages to distribute its products.
Over the past few years, Insurance has worked to establish its UK business, having sold its Australia-focused underwriting arm to 360 Construction and Engineering in 2020.
But last year Insurance signaled its renewed ambitions in Australia with the acquisition of TK Specialty Risks, an underwriting agency focused on professional and financial lines with a network of more than 70 brokers across the country. TK Specialty has since been renamed Insurance Australia.
PSC says the acquisition of Insurance UK is “highly complementary” to its strategy in the market, where it has built a significant presence with brokerage acquisitions.
Insurance UK, a construction-based underwriting agency with offices in London and Manchester, achieves approximately $4.4 million in annual revenue, has an extensive local brokerage market distribution and strong capacity support subscription.
“It is highly complementary to our existing Chase Underwriting UK construction underwriting agency business, expanding our current distribution platform and product range,” PSC said.