Irresistible force
The CBN deal continues Steadfast’s drive to be the master of Australia’s insurance distribution system By Terry McMullan
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STEADFAST’S DOMINATION OF THE insurance broking sector was sealed early in October with the acquisition of the country’s largest authorised representative network. The deal to acquire IAG’s Community Broker Network (CBN) – which was already a member of the Steadfast network – enabled IAG to dispense with a distribution unit that no longer fits its strategic plan. Steadfast’s payment of an undisclosed sum bought it a network of 367 authorised representatives (ARs) who place about $500 million of total billings, $418 million gross written premium and 135,000 SME clients across Australia. For Steadfast Managing Director and Chief Executive Robert Kelly – a former broker who co-founded Steadfast 23 years ago – the acquisition is one more step in his long-standing quest to build a corporation that provides brokers with everything they need in the insurance sales process, including its own broker systems and trading platform. The company already enjoys considerable influence in the industry, and this acquisition will only increase its ability to insuranceNEWS
October/November 2018
swing advantageous deals with insurers for specialised policies and enhanced distribution arrangements. Steadfast has owned a majority shareholding in the national Ausure AR network since 2014, but there will be no merger with CBN. Mr Kelly says this will “encourage robust competition. Steadfast has a strong track record of acquiring businesses that successfully compete against each other while operating independently.” He cites as an example the fact that Steadfast owns three underwriting agencies and three insurance brokerages that compete in the strata insurance market. “These companies win business on their own merit, have developed their own unique value proposition and actively compete for business. The fact that we can support these competing businesses further demonstrates the success of our diversified business model.” Paul Ayton, a long-serving IAG executive who was made managing director of CBN in 2016 after the acquisition of the Westcourt AR group, has left the company. He has
