Wesfarmers backs broking business after underwriting sale

TIO

Wesfarmers has strongly backed OAMPS and its other broking and premium funding business, after announcing the sale of its underwriting business to IAG.

Announced this morning, the $1.9 billion sale is subject to regulatory approval but could be finalised by the second quarter of 2014.

Wesfarmers Managing Director Richard Goyder says the company is pleased to retain its broking and premium funding operations.

“We really like the broking business. It’s grown significantly in recent years and we like the growth prospects,” he says.

Goyder was not able to indicate how the proceeds of the sale would be used but says Wesfarmers is still open to the prospect of acquiring new businesses.

The deal includes the Lumley and WFI brands, as well as a 10-year insurance distribution agreement with Coles. IAG Managing Director Mike Wilkins says it will further accelerate the growth of IAG.

“Wesfarmers’ underwriting operations are highly complementary to our existing intermediated businesses in Australia and New Zealand and will be integrated with our CGU and NZI operations,” he says.

“This acquisition confirms IAG’s position as the leading intermediated insurer in Australasia and, based on FY13 results, increases our gross written premium base by around 18%.”