AUB Group has a “list of candidates” interested in replacing CEO and MD Mark Searles when he leaves in October next year.
Chairman David Clarke told the company’s AGM in Sydney last week the search is “well advanced”.
“The list of candidates who have indicated interest in the role allows the board to be confident that we will have a suitable successor for Mark,” he said.
Mr Searles told the meeting that during his tenure the group has transformed from focusing on Australian broking to become a broader “provider of risk management” across Australia and New Zealand.
This year was successful across all divisions, he says. “What was particularly pleasing to me was that the growth was predominantly organically driven.”
Mr Clarke says when Mr Searles became CEO in 2012, Australian broking accounted for 90% of business; now it accounts for 65%.
“The expansions into risk services and New Zealand broking have been both well timed and profitable,” he said.
Mr Clarke believes the Hayne royal commission’s findings and the upcoming federal election will contribute to a volatile year ahead.
“The royal commission… has shocked all those who have had even a passing interest in this topic,” he said. “The year ahead, as we can see already, will be dominated by volatility.”
He says the royal commission has produced no adverse findings in relation to brokers, but the proposed extension of the ban on conflicted remuneration may have an impact.
“Part of the way insurance brokers are remunerated is through commission, and although it is too early to predict, commission payments in any part of financial services may be considered inappropriate by the commissioner. Our brokers have been, over many years, moving to at least in part being remunerated on a fee basis, so this trend may quicken.”
AUB previously announced a $116 million capital-raising to support acquisitions, organic growth and debt repayment. The group’s first equity capital-raising since its 2005 listing will underpin the deal to take a majority interest in Victorian-based broker Adroit Insurance & Risk.
“Availability of insurance in some sub-sectors is proving hard to find and therefore the reputation for writing good business is becoming a more valued asset,” Mr Clarke told the meeting.
“We continue to look for opportunities to expand and believe that with a strong balance sheet in what may be volatile markets, there should be attractive opportunities.”