Omnisure Announces Merger | Insurance Business Australia

The Australian mergers and acquisitions (M&A) scene has changed since the halcyon days of 2021, with a record $300 billion worth of deals completed this year. The impact of inflation, including high borrowing costs, has reduced the total number and volume of deals since then – including in the insurance industry.

But mergers continued throughout the industry. The result was sometimes the end of smaller family businesses. Not this time.

“I think the real opportunity for us and the reason we made this decision was that this merger really helped us achieve our goal of becoming a mid-sized, family-owned, service-focused business – which is a dying breed,” said Schalk Van Der Merwe (pictured above), managing director of Sydney-based Omnisure.

Youth and experience?

The brokerage house is run by the second generation: Schalk Van Der Merwe and his younger brother Ben Van Der Merwe, who is a director. Many of the more than 20 employees are under 30.

From October, Omnisure will take control of Acacia. The latter consists of two directors and a handful of employees. Both companies will operate under the Omnisure brand as part of the Steadfast brokerage network.

“A big benefit for us is that the Acacia team brings more than 85 years of specialized insurance solutions to mid- and large-sized businesses,” Van Der Merwe said. “They also strengthen our capabilities in construction and nonprofits, and bring the ability to do internal contract reviews.”

Van Der Merwe said the current difficult economic situation was not an obstacle to concluding deals.

“We’ve always been on a growth path with aspirations to grow the business, and this merger takes us 12 to 18 months into the future in terms of our business plan,” he said. “It’s a good opportunity for us, regardless of the (economic) climate.”

The brokerage firm’s CEO also noted that the insurance brokerage business – unless a major disaster occurs – is generally very resilient.

In fact, his firm almost merged with another brokerage about 18 months ago. He’s been looking for another opportunity ever since.

Van Der Merwe said the two companies fit together well culturally and in terms of team composition.

Both firms focus on mid- and large-corporate clients, but Acacia, he said, is bringing in new business.

“They are focusing on heavy industry and nonprofits, which is something we haven’t traditionally focused on,” Van Der Merwe said.

A compelling reason: peace of mind

Martin Van Rhoon (pictured below), director of Acacia, said there were “compelling reasons” for the merger.

“First and foremost, we wanted to make sure we were doing the right thing for our customers for the long term, and with Omnisure we have access to an expanded team that can help us improve our service offering both now and in the future,” he said.

Another reason – his son, Tristen, works there.

“So I had a clear picture of what the culture was like,” Van Rhoon said. “The team is made up of promising, energetic insurance professionals who work hard and really want to provide good service to their clients.”

Challenges Ahead of Us

But it’s a tough time for the industry. Van Der Merwe said the issue of pricing is the most important thing.

“Talking about pricing with customers is definitely on everyone’s mind,” he said. “It’s a challenge, but it’s also an opportunity.”

He added that the energy that his company’s young employees put into working with clients can actually help them improve the quality of insurance.

“I think the current price reduction is actually conducive to that (finding improvements),” Van Der Merwe said.

However, he distinguished between commercial and individual customers.

“I would say commercial insurance premiums have remained flat, if not declined slightly,” he said.

Van Der Merwe said prices for motor, home and renters insurance remained competitive.

“We really feel for our individual customers as house prices and renters continue to suffer,” Van Der Merwe said. “Unfortunately, insurers have really struggled with profitability, which has simply meant that insurance premiums have had to go up.”

Changing redundant structures can smooth out the increases, but sometimes, he said, his firm charges a lower fee for the help.

Van Rhoon offered a more macroscopic view of the industry’s challenges. He said the degree of economic uncertainty and political unrest, coupled with the rise of artificial intelligence and cybersecurity risks, are big issues affecting brokers.

“We continue to focus on balancing the increased frequency and severity of natural disasters with our ability to mitigate them and build resilience,” he said. “Ultimately, the biggest challenge in insurance remains what it always has been: adapting to change while providing advice and solutions to protect our customers’ needs.”

He suggested that brokers are an essential survival tool for businesses, especially in the face of current complex challenges.

“It is very difficult for insurance clients to navigate the complexities of these issues without expert risk advice from experienced brokers,” Van Rhoon said.

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