Home / Corporate / AUB looks to global markets for complex risk placements
22 February 2021
AUB Group expects to place more of its complex risk business outside of Australia as challenging conditions at home show no signs of easing in the near future.
As part of its response to the difficult environment, the business announced last week the creation of a dedicated unit called Austplacements to manage the handling of complex risks.
The unit will provide support to broker members of the Austbrokers and Austagencies networks.
Heath Amber will lead Austplacements as CEO with effect from March 15, leaving his current role within MGA as Millennium MD. He will also take responsibility for AustRe, Austagencies’ bespoke London placement and reinsurance capability.
“It’s become increasingly challenging to place risks in the local market, and we, unfortunately, anticipate this will continue for the foreseeable future,” AUB Group CEO and MD Mike Emmett said. “Enhancing the ability of our brokers to place complex risks for their clients is an absolute priority.
“This new enterprise will enable us to improve the placement of almost $1 billion in premium that falls into this category.”
When asked if more risks in the future will be placed through London and Singapore, Mr Emmett told insuranceNEWS.com.au that “for some classes of risk, yes we do believe this will lead to an increase in risk placement in international markets”.
Brokers have found it extremely hard to arrange insurance for clients in the current climate. This is especially the case for customers that are perceived by insurers to be operating in high-risk sectors such as theme parks.
Steadfast Group, the country’s largest broker network, set up a similar unit to handle complex risks about five years ago.
Called Steadfast Placements, it is a specialised service for the network’s brokers who need to arrange insurance programs for challenging and hard-to-place business.
An underwriter who specialises in niche and hard-to-place risks says many broking firms and groups have previously set-up dedicated ventures to manage difficult placements but very few last the test of time.
“But if it is well planned, well thought out and well executed, it may work but a lot of stars need to align,” the underwriter, who did not want to be named, told insuranceNEWS.com.au.
“As for the capacity and risk appetite of the London and Singapore markets, I think it truly depends on the class and risk. For example, there are some instances where the London market is less accommodating than the local market.”