August 26, 2006
Competition Drives Insurer to Foreign Shores
With home-grown competition eating into its profits, Australia’s biggest auto and home insurer is looking to expand its operations across the ocean in Asia. Insurance Australia Group Ltd. reported a 13 percent decrease in its second-half profit; the company was forced to reduce policy prices with Promina Group Ltd. taking a major chunk of its clientele.
Promina announced that its first-half policy sales were up by 3.7 percent while Insurance Australia reported a 3.7 percent drop in premium revenue for the same period. Michael Hawker, CEO of Insurance Australia, has added to the company’s Asian assets with the acquisition of 24.9 percent of China Pacific Property Insurance. The Chinese insurance outfit serves 12 percent of China’s property and casualty insurance market.
Antitrust laws do not permit Hawker to expand in Australia. Insurance Australia has more than 40 percent of the auto and home insurance market down under. With units in Thailand, Malaysia, and Singapore, the company is looking to secure at least 40 percent of its premium revenues outside Australia and New Zealand.
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