Steadfast says it remains focused on merger and acquisition opportunities rather than using capital to buy back its shares following price drops.

“Share buybacks are certainly an option from a capital management perspective but we, management, strongly believe the selective M&A opportunities that we’ve got and long-term margin improvement initiatives we have will definitely provide a better long-term value creation for the shareholders,” CFO Hannah Lee said. 

The company completed $238.9 million of acquisitions in the first half and has $195 million planned this half, it said during its results briefing yesterday.

CEO Robert Kelly says the New Zealand insurance market slump has provided opportunities and it is upgrading equity in some businesses there.

“Everybody’s struggling to get their numbers, but it’s a great buying opportunity, because it’s a very stable market in terms of the consumers wanting to buy,” he said.  

International CEO Samantha Hollman says her division’s focus remains on the US and UK, but an opportunity in India has been brought to Steadfast’s attention.

“It’s such a huge part of the world and the economy and we’ve had interest reach out to us, rather than us to them,” she said. The company will keep its “eyes and ears open to everything and look at everything before a decision is made”.

Steadfast’s first “trapped capital” investment in an ISU Steadfast member is scheduled for completion on Sunday.

Shares of global brokers tumbled this month as investors reacted to US and Spanish companies announcing AI apps aimed at insurance buying. Steadfast and AUB shares also fell.

“It is astounding when you see the way the market’s reacted, but about a small insurer in Spain with a little product that couldn’t really do anything like what we do now – and the whole market got put into turmoil,” Mr Kelly said. 

He says AI will be a disruptor and some people will “enjoy speaking to somebody that’s been made out of digital analytics as opposed to ringing up their local insurance broker”.

But data analytics and AI capabilities “are the DNA” of growing brokers and are streamlining processes.

“Our businesses are where people want to be able to talk to somebody, and I can’t see the AI that is going to interrupt that. What it may do for us internally ... is absolutely allow us to expand our businesses without expanding our FTE cost base.”

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