AUB Group expects its Australia and New Zealand “owner-driver” shared equity model will also support UK expansion as the company looks to grow its international retail business.

CEO Michael Emmett says recent British retail investments have enabled AUB to start replicating the model in that market.

“While relatively unfamiliar in the UK and other international markets, our engagement with industry participants suggests our owner-driver model is already being recognised as a clear competitive advantage for AUB,” he told a results briefing.

AUB has built on its 2022 Tysers acquisition with additional deals, including last year buying an 80% stake in Movo Group and a 40% stake in authorised representative network Momentum Broker Solutions.

The merger and acquisition focus this fiscal year includes UK retail expansion, both in broking and managing general agencies, and adding to Tysers’ wholesale expertise. In Australia it is focused on “bolt-ons” and in New Zealand on equity in the network.

Mr Emmett said AUB has achieved considerable scale in wholesale broking and agency operations, but retail broking remains central to its identity, contributing 62% of global revenue.

In Australia, premium rates have increased about 4%-5%, he told the briefing. The New Zealand market has softened more, while the international market is a “mixed bag”.

Pricing is likely to remain rational, particularly because insurers are wary of any profit reduction as interest and investment income softens, Mr Emmett said.

AUB’s underlying net profit rose 17.1% to $200.2 million in the year to June 30 and the company expects it will increase to $215-$227 million this year.

“While premium rates have moderated in some markets, AUB remains confident in its ability to manage pricing dynamics through a range of strategic levers and does not consider premium rates to be a material factor to achieve the financial forecasts,” Mr Emmett says in the group’s annual report.

He told the briefing clients may reduce cover or take deductibles in a hard market, while fees held steady during difficult conditions can be increased as markets ease.

“All of that contributes to why we’re able to generate more income per client and grow our commission and fee income, frankly irrespective of the premium rates environment.”

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