A leading New Zealand-based insurer has confirmed its proposed $41 million (NZ$46 million) acquisition of an Australian specialty insurer.
CBL Insurance announced the deal to buy Assetinsure Holdings Pty Ltd after being granted approval for the transaction by the Australian Prudential Regulation Authority (APRA
CBL managing director, Peter Harris, said that the move represents an important step for the business as it looks to build for the future.
“Assetinsure is an important strategic step to increasing our business in Australia,” Harris said.
“We can now distribute products in Australia through an APRA
regulated entity, and we can also introduce certain Assetinsure products and relationships into our existing international markets.”
The largest surety bond insurer in Australia with offices in Sydney, Brisbane and Perth, Assetinsure provides a range of speciality products including credit enhancement, surety bonds, specialised property insurance, aviation, and rural risk.
In 2012 CBL acquired from Vero
the Deposit Power business – a market leader in Australia in the provision of property deposit bonds, which are used by property buyers as a deposit in buying a property, rather than using cash.
The Assetinsure acquisition follows a report on Insurance Business in April
, which detailed CBL’s growth aims for the business in Australia and the transaction is expected to be settled by October with Harris saying the purchase price will be settled through a mix of shares and cash.
The New Zealand-based, privately-owned credit surety and financial risk insurer has plans to increase its business in Australia to address the current heavy weighting of the company’s business in Europe.
“Currently our business is strongly weighted to Europe, accounting for more than 70% of the business written by the company, and we expect the purchase of Assetinsure to go some way to address this,” Harris said.
“We are excited to be able to utilise the knowledge and experience that the Assetinsure team have in their Australian market, and look forward to being able to apply some of our international products and knowledge into the Assetinsure distribution channels.”
Peter Wedgwood, executive director and largest shareholder of Assetinsure, said there was a great deal of synergy between the two companies.
“We are very pleased to become part of the Group. CBL’s global focus will provide us access to other markets.”
The acquisition follows the completion last month of a 34.99% shareholding in the Mexican insurer Afianzadora Fiducia, SA de CV (Fiducia).