Australian Insurance Conglomerate BuysAnother NZ Broker

Australian Insurance Conglomerate Purchases Another New Zealand Broker

The announcement earlier this month by Australian conglomerate Wesfarmers that it had signed an agreement for its New Zealand broking division; Crombie Lockwood to purchase the indigenous firm ACM Ahlers sees further amalgamation in insurance industry and greater foreign control of both the underwriting and broking functions.

The New Zealand broker distribution market has over the last decade seen the erosion of consumer choice when it comes to electing their preferred broker. Amalgamation in the industry has meant many of the smaller niche operators have disappeared and in some cases their clients find themselves dealing with a multinational that just does not offer the service standards or understanding of their industry that they previously enjoyed.

Andrew Newman; Director of Hamilton insurance broking firm Hutchison Rodway says “It is understandable that overseas firms are purchasing the smaller players within the New Zealand industry. With the inflated commission rates they enjoy from the insurers they see a far greater return than the small player ever would. Unfortunately these profits will go offshore. It’s a pity the client does not benefit from these profits, particularly in these difficult times”.

Finding a New Zealand owned Insurance Broker will only continue to be a difficult task. It is likely there will be further amalgamation within the industry. It has also become increasingly difficult for new broking firms to establish themselves in the current market. Foreign control of the New Zealand insurance industry is a happening thing.

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