Insurance funders to merge from August

 

Two competitors in the insurance premium funding market, Pacific Premium Funding and GE Commercial Finance, have announced plans to merge their operations.

A joint venture operating under the Pacific name is due to commence operations from the start of August.

GE will be the major shareholder in the joint venture, which is to be headed by Pacific managing director Grant Burley and will use Pacific’s systems.

Pacific’s Western Australian operations manager, Pierra Jeuring, said the two groups had six staff in Western Australia focused on sales and marketing.

Pacific’s major competitors in the WA market include Hunter Premium Funding and Perth-based Alliance Finance Corporation, which is listed on the Australian Stock Exchange and therefore provides one of the few sources of hard data on the market.

In its latest report for the six months to December 2003, Alliance reported strong growth in new lending, to $128.7 million, and net profit, to $1.2 million.

The growth was helped by the opening last year of offices in Sydney, Melbourne and Brisbane, which managing director Martin Kane said accounted for 15 to 20 per cent of Alliance’s total sales.

Mr Kane said he did not anticipate big changes in the local market as a result of the tie-up between Pacific and GE.

He estimated the national insurance premium funding market was worth more than $3 billion annually, with the Western Australian market worth about $350 million.

Insurance premium funding is designed to help with cash-flow management, by enabling businesses and professionals to pay their insurance premiums in instalments.