Calliden CEO Nick Kirk has spoken about the group’s renewed appetite for joint ventures, with plans to launch a niche personal lines agency well underway.
Fresh off the sale of event and entertainment specialist Arena Underwriting, Kirk says the group is keen to reactivate its successful joint venture strategy.
“We plan to launch a niche personal lines agency in the second half of this year and this is progressing well,” he says.
“Our interest in joint ventures has always been driven by the attractive annual returns that can be achieved by agency businesses as well as the high valuations they can command once they are established.
“Values of agency businesses are quite high at present and the fact that we effectively pay tax on their annual profits but not on the proceeds of a sale made [the sale of Arena] a transaction which we felt was in shareholders’ best interests.”
Kirk says that he expects joint ventures to become a larger part of the business in time, perhaps even matching its agency and insurer profits.
“Our experience from starting ventures has to date been very positive with a return on investment of more than 50%,” he says.
“I see no reason why that cannot continue and build into the future.”
Kirk also says he expects IAG’s acquisition of Wesfarmers’ insurance business to provide opportunities to pick up new business.
“There is always some business that gets displaced as relationships change and attention turns to integration,” he says.