AUB Group says a deal to acquire broker and underwriting agency business Prestige for $432 million will accelerate its UK expansion and deliver significant benefits as its Australian business model is replicated internationally.

Prestige, established in 1973 in Belfast, includes a portfolio of broking and underwriting agency businesses operating across Britain and Ireland, and an insurtech platform.

The business placed more than £310 million ($613 million) gross written premium last year and AUB CEO Mike Emmett says it has a high-quality management team.

“The acquisition is highly complementary to AUB’s strategy and will enable us to accelerate the delivery of growth and margin benefits planned for the UK and the international division,” he told a briefing last week.

Under the agreement, AUB will acquire 95.9% of PIHL Holdings, with the deal expected to be completed before June 30, subject to regulatory approval.  

Mr Emmett said AUB intends to bring the Tysers retail business under the Prestige brand as it builds market presence.

AUB has completed a $400 million institutional share placement to fund the acquisition and associated costs.

The company says first-half underlying net profit after tax is expected to be $90-$91 million and has reaffirmed full-year guidance of $215-$227 million, before the impact of Prestige and shareholding step-ups in Pacific Indemnity and AUB360.

Mr Emmett says AUB achieved solid to strong performance across much of the business in the first half, muted by disappointing results in New Zealand and currency impacts.

Australian broking remained solid, with positive factors offsetting lower interest income and highly competitive conditions in the large and corporate segment, while underwriting agencies performed well but with competitors in strata significantly reducing rates.

Weakness in corporate markets affected New Zealand and Mr Emmett said initiatives to grow market share “have not delivered satisfactorily”.

“We’re working with these businesses to adjust short- and medium-term performance outcomes,” he said.

AUB will report its first-half results on February 24.