Ensurance sells Australian retail brokerage business to focus on growth
Special report: Insurance underwriting agency Ensurance is making good on a plan to adopt a new strategic direction, signing a multimillion-dollar share sale agreement to offload its Australian retail brokerage business.
Ensurance (ASX:ENA) confirmed it had reached a $4.1 million agreement to sell its shares in Savill Hicks Corp, following through on restructuring plans announced in May.
The agreement includes $2.2 million in cash, the buyback of 30 million shares in Ensurance, the transfer of employee entitlements to the Purchaser, and the cancellation of convertible notes held by related parties of Stefan Hicks.
Ensurance provides a unique solution to a £2.9 billion construction and engineering underwriting market in the UK and EU.
It has seen over £1.4 million in written policies since business inception in August 2016, with cash flow generated in early 2018. There is a significant opportunity for this model when it is rolled out in Australia.
The business told investors funds from the sale will be used to build out Ensurance’s specialised insurance offering in the UK and Australia, expand its broker network and bring new innovative products and services to market.
It also plans to hire additional underwriting resources and invest in sales and marketing to support strong growth globally as a Managing General Agent (MGA).
The MGA model delivers high-margin revenue with no on-balance sheet risk for any insurance policies sold.
Ensurance chairman Tony Leibowitz says the company is focused on developing a speciality brand known as a one stop shop for construction and engineering industry insurance.
“This Agreement is a significant milestone for Ensurance, and a very positive outcome following careful negotiations.”
“The sale of the retail brokerage business is a great step forwards for the business and the shareholders, releasing capital that we can now invest in pursuing our global business strategy.”
“We have big plans for the Australian market and can focus on replicating the success of the UK MGA model in this market.”
This special report is brought to you by Ensurance.
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