PSC seals Ensurance UK deal, steps up in HK and Australia
PSC Insurance Group says it has a binding agreement to acquire the UK business of underwriting agency Ensurance after completing due diligence, after the planned investment was announced in July.
The Melbourne-based broking group also sealed another acquisition in Hong Kong, closing a transaction in August for Charter Union Insurance Brokers (CUIB) and bought Trade Credit Risk, a brokerage in Australia.
PSC says the three acquisitions total about $22 million, including $15 million in upfront cash payments.
The broking group expects the new additions to contribute “positively” in the current financial year, with incremental pre-tax earnings of about $1.4 million and an annualised initial pro forma contribution of about $2.4 million.
PSC says the Ensurance UK deal is subject to customary closing conditions, which it expects to achieve in the third quarter of FY2022/23.
“[Ensurance UK] is an underwriting agency based in London, specialising in the construction industry,” PSC said.
“Given this specialisation, [it] is highly complementary with our existing Chase Underwriting UK business, which similarly specialises in construction insurances.”
PSC says Ensurance UK will provide additional scale, markets, distribution and an experienced team.
PSC has invested heavily to grow its UK business, which performed solidly in the last financial year. The UK arm, which also includes its smaller scale Hong Kong business, achieved about $1.25 billion in gross written premium while underlying earnings before interest, tax, depreciation and amortisation rose to $39.1 million from $28.6 million.
It says CUIB, a general insurance brokerage, provides the group with a good operating platform in Hong Kong.
PSC’s 2022 annual report says the Hong Kong businesses have performed well, are profitable and cashflow positive.
For Trade Credit Risk, PSC says is acquiring a 90% equity stake in the specialist trade credit insurance broker.
PSC says Trade Credit Risk will provide a new specialisation to the group and expand its capability in the Australian market.
