AUB Group says the UK retail broking market remains one of the largest and most fragmented in the world despite recent consolidation, and it is looking at further opportunities following its $432 million Prestige acquisition.

The broker last week said the UK regulator had cleared the transaction, announced in January, and it is expected to be completed by May 1. 

CEO Mike Emmett says increased scale in the UK improves diversification across industries and client segments, and provides a platform for further bolt-on acquisitions. 

“The UK market continues to present attractive consolidation opportunities, and having a scaled platform in this market means we can act selectively and from a position of strength,” he told a results briefing last week. 

The earlier than anticipated completion of the Prestige deal contributed to the company raising its guidance for this financial year.  

AUB’s first-half underlying net profit increased 13.9% to $90.4 million, underpinned by the Australian broking and agencies divisions, international operations and BizCover. New Zealand earnings fell. 

Analysts at JP Morgan say AUB has delivered reasonable growth despite a softer insurance cycle and has addressed artificial intelligence fears. 

AUB is “on the front foot outlining impressive ideas” to engage on the customer side and across its operations, they say in a research note. 

The BizCover division has developed a ChatGPT app, which is awaiting approval from OpenAI, and it has outlined plans for introducing AI to enhance broker capabilities. 

Morningstar says the small investment in the AI app is a worthwhile test of the market. 

“At this stage, we are not convinced a conversational approach is more efficient than using drop-downs to arrive at a quote,” it said. 

“But as comfort with AI tools grows, it may pique the interest of new customers not comfortable entering their details on a website like BizCover, or who are not confident they have selected appropriate cover.”