NRMA leaps Tasman with State buy

Friday 9th February 2001

Australia's largest general insurer has secured a beachhead in the New Zealand market, buying State Insurance from CGNU for $A325 million ($406 million).

State, which employs 1400 staff and has a 19% share of the general insurance market, made an $18.6 million profit in 1999 on total assets of $486 million.

The foray is the first for NRMA into New Zealand but managing director Eric Dodd said State was "a good strategic fit" with complementary people, products and culture.

The company planned to achieve cost savings of about $10 million a year by changing the distribution and claims network.

NRMA human resources general manager David Smith will replace Tim Sole as State's managing director.

Chairman Nicholas Whitlam said he expected the acquisition to be earnings positive within 18 months. It was "on the small side" for cash-rich NRMA, which was looking to make a medium-sized investment over the next year.

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