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AUB board raises the bar on governance

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AUB Group is stepping up its governance focus to drive a culture of accountability and transparency across its network, Chairman David Clarke told the group’s AGM in Sydney today.

“The board has increased their expectations for more rigorous governance and risk management standards and are working with management to ensure adoption,” he said.

“As a result, the current governance model across our partner business is under review, with key structural and personnel changes that aim to enhance objectivity at partner boards, while uplifting capability and improving transparency for the group across its investment portfolio.”

Mr Clarke says AUB is mindful of the heightened focus and scrutiny of the financial services industry in light of the Hayne royal commission findings.

“AUB Group is committed to having a responsible and sustainable portfolio of businesses, with a focus on policies and programs that ‘do the right thing’ by our partners, our environment and the communities in which we operate,” he said.

The group’s underlying adjusted net profit last financial year included a $2.3 million impact from a substantial fraud event at Austbrokers Canberra.

Recovery proceedings are continuing, but the group does not expect any further negative earnings impacts.

CEO Mike Emmett, who took over from Mark Searles in March, told the meeting he has been impressed with the quality and capability in each of the group’s brokerages and underwriting agencies.

“I am also comfortable that the issues experienced in Canberra are not systemic across the AUB Group,” he said.

Mr Emmett says the company is making “strong progress” against six strategic imperatives outlined in August with the annual results.

AUB has called for expressions of interest from existing and new capacity providers as it seeks to improve its offerings, and is now following up with individual insurers.

The company has also incorporated AUB Business Services into AIMS as changes are made following the recently completed split with Insurance Brokers Network Australia (IBNA).

“The business is making additional investment into AIMS capabilities, particularly in claims, to improve efficiency and drive increased partner adoption,” Mr Emmett said.

The group is working closely on a number of merger and acquisition opportunities and says it has changed its focus “from reactive to pro-active engagement”.

AUB expects average annual commercial line premium rate increases of 4-5% in Australia this financial year, and has reaffirmed guidance for adjusted net profit growth of 8-10%.