NZbrokers’ entry into the New Zealand market will benefit the New Zealand broking community and the insurance industry as a whole, its managing director says.
NZ Brokers Holdings was created after Austbrokers acquired 100% of BrokerWeb Management, as well as 50% of BrokerWeb Risk Services, in a deal worth more than $20 million late last year.
Austbrokers Holdings first entered the New Zealand market in 2006 through its partnership with Insurance Advisernet, taking a 38% equity stake in Insurance Advisernet NZ.
The BrokerWeb deal was billed as a major shake-up for the New Zealand broking industry.
NZ Brokers Holdings then launched NZbrokers, bringing together the members of BrokerWeb Group and Brokernet Group to become the third largest broking group in New Zealand.
NZbrokers said the combination of the broking groups meant it had $420 million in total gross written premium (GWP) annually and 54 businesses serving more than 120,000 clients spanning the length of New Zealand.
Including Advisernet, the wider group has more than $500 million in GWP and 84 adviser businesses.
Jim Harris, former managing director of BrokerWeb Management, was appointed managing director of NZbrokers.
Harris said there would be a number of benefits to brokers who were part of the group. The size of the organisation would give members access to resources and business systems that would be out of their reach as individual broker businesses. “It reinforces everything we stand for. With greater size we have greater strength and position and influence and the ability to secure more benefits and advantages not only for our members but for their clients,” he said.
He said the combination of BrokerWeb and Brokernet had been a natural fit.
“BrokerWeb and Brokernet were very much aligned in terms of their professionalism and standing and respect in the marketplace. For us it was a very good fit and gives us the ability to do things together in a much more meaningful way than we could have done separately.”
The backing of Austbrokers also provided a number of benefits, he said.
The NZbrokers team was recently in Australia looking at the services Austbrokers delivers to its members there.
Harris said: “We can tap into those resources, whether it’s marketing or compliance and that gives us a much greater ability to deliver additional services in those areas to our members. Our ethos is we operate very much in a collaborative way and it’s relationship- and partnership-based and built on a high level of trust and transparency.”
But Harris said while the level of scale would bring benefits to members, the group was focused on retaining its personal touch. “Size of course matters and gives us additional leverage but it’s very much on a partnership basis recognising we need to work together. There’s value in doing that, recognising that there needs to be value and benefit flowing both ways. But size gives stability and the ability to provide more benefits and secure more advantages going forward.”
First on the to do list is binging BrokerWeb and Brokernet advisers together to work on the same broker management platform.
That would mean designing a “best of both worlds” solution, based on the systems they each currently use, Harris said.
“The project is going to examine both systems and the advantages and benefits of both with the view of bringing those together and building a world-class system going forward. Also, while we are doing that we are looking at opportunities for connectivity and streamlining the way we do our business, looking at accessing information for managing the businesses, marketing initiatives…all those sorts of thing.”
Harris said the group was formed with the intention of giving respected, professional indigenous brokers the opportunity to not only survive in a changing environment but grow and prosper. “We believe we have that ability and can deliver that to those people.”
There has been a lot of consolidation in the market recently as individual brokers moved under the wing of bigger corporates and insurers merge. Harris said it was inevitable that would continue.
“Consolidation also creates opportunities and we think we will continue to see people deciding to seek their own fortune and set up their own businesses. With consolidation comes size and corporatisation and that doesn’t fit everyone. In the New Zealand market it’s very much a personal relationship-based business. I think there’s an opportunity for brokers to operate at that level. If you look at our organisation, we’re very committed to local people serving local people.”
Harris said NZbrokers’ goal was to be New Zealand’s most trusted insurance and risk solutions network. “We have become the true challenger brand in the market and have the ability to compete with anyone. We have very, very good national representation and that in itself creates opportunities.”
Insurance premiums have softened recently and competition has increased, but Harris said having the backing of a group would help brokers navigate that.
“Given the extensive benefits and support provided by NZbrokers, its members and clients are well-positioned to manage their way through and take full advantage.”
David Crick, chairman of Brokernet New Zealand, said: “Our collaboration with NZbrokers brings significant size and scale to our members. This will facilitate robust partnerships with the insurer panel, and ensure our clients’ interests are further protected.”
Harris said: “The emergence of NZbrokers as the challenger brand and significant player in the market is good for its members and their clients, its strategic partners and the industry as a whole.”
He said the group was based on four pillars – collaboration, respect, tenacity and momentum. “We are building partnerships, standing shoulder-to-shoulder with members, acting with integrity and honesty at all times, looking for solutions and looking to work with our partners in a meaningful way and investing in success and striving to create a bright future. Those four pillars underpin the future we have.”
Meanwhile, Austbrokers has announced its new equity partnership with Allied Health Australia, a leading occupational health and safety rehabilitation service provider.
“This acquisition reinforces Austbrokers’ disciplined approach and appetite to deliver on its strategy. Austbrokers has long signalled its intention to expand scale in risk services provision, and take our highly successful Owner-Driver business model further into this market segment,” said Austbrokers Holdings chief executive and managing director Mark Searles.
Full article available on pages 34-35 of CoverNote magazine: http://issuu.com/benefitz/docs/cn_september_2015_web/37?e=0