Brits call off ANZIIF merger

Breaking News, 19 December 2008

The merger between the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and Britain’s Chartered Insurance Institute (CII) has been called off, with the CII blaming “financial discrepancies” in ANZIIF’s accounts.

However, ANZIIF says the accusation is unfair, inaccurate and inappropriate, with CEO Joan Fitzpatrick saying the fall in her organisation’s earnings “wasn’t a surprise to them at all”.

She says the decision to call the merger process to a halt and blame ANZIIF for its failure was totally unexpected. “We are shocked and very disappointed.”

The CII issued a statement in London late yesterday saying it has decided to terminate the proposed merger with ANZIIF “after it has become apparent that ANZIIF’s revenues are falling dramatically and it is potentially heading for a loss this year. This is the second year running ANZIIF will lose money.

“The CII Group is deeply disappointed the ANZIIF management only disclosed this information this week. The CII now feels any merger with ANZIIF would be detrimental to its members’ long-term interests.”

Ms Fitzpatrick told insuranceNEWS.com.au the two institutes have been in daily contact and the financial issue was well communicated.

“ANZIIF had a major contract that was deferred at the last minute in November, so the income from that project was also deferred,” she said. “We’re a not-for-profit organisation and things like this can have a big impact on our accounts, even if it’s temporary. This is a pretty typical scenario in the circumstances.”

In a note to members yesterday, Ms Fitzpatrick said the CII was facing “significant resistance” from members to a merger taking place at this time.

“We intend to revisit our proposal at a future date when the global economic environment is more favourable.”

CII CEO Sandy Scott adopted a more conciliatory tone in a later statement, saying the global financial environment has changed rapidly since the merger talks began more than a year ago.

“This turmoil has affected financial services worldwide and it is likely that the current recession will continue for some time,” he said. “There is also a general feeling that a merger in such circumstances is not timely.”

The merger of the two institutes into a body called the Chartered Institute of Insurance and Financial Services would have contained more than 102,000 members across 170 countries. UK media reports suggest the CII may go ahead with the name change, anyway.

All reference to the merger has already been removed from the ANZIIF website.