PSC says competition for talent 'very high', outlines acquisition focus

PSC Insurance Group has indicated its wage costs will see “more than usual” pressure amid an industry-wide shortage of skilled staff and says its broking acquisition strategy will change, focusing on potential targets where “prices haven’t moved as much”.

The listed Melbourne-based broking group has “got great people in the business and we want to keep them,” MD Tony Robinson said during an earnings call yesterday following the release of PSC’s results for the last financial year.

“The competition for new talent remains very high in all our operating markets, and we expect this will pressure wage costs more than usual.”

PSC also elaborated on its acquisition plans in the coming months, saying the business is ready for deals similar to the Tysers joint venture arrangement it has with AUB.

“We have not traditionally partnered with other groups however are delighted to be doing it with AUB in this situation,” PSC said.

“We have similar approaches to broking and similar values, which will ensure that this partnership works well.”

PSC says with the competition for broking businesses in the UK continuing to heat up, it needs to be open to different paths to support the growth of its business there.

“The joint venture with AUB is a good indication of our flexibility to change as our environment changes,” PSC said.

AUB announced in May it is buying UK-based Tysers for $880 million and has a non-binding agreement with PSC for it to own half of Tysers’ UK retail division as part of a 50/50 joint venture.

“We’ll look for some opportunities where there might be joint ventures but also we’ll focus on smaller acquisitions where the prices haven’t moved as much,” Mr Robinson told insuranceNEWS.com.au.

He says Tysers is “fairly priced but full of great people and it’s a retail business [where] we’re looking to increase our presence”. PSC is contributing about $60-70 million to the joint venture.

PSC’s UK business now makes up 49% of overall underlying revenue of $254.3 million and is set to strengthen further with contributions from the Tysers joint venture and acquisition of Ensurance UK, a construction-based underwriting agency with offices in London and Manchester.

“Ensurance UK fits us because it’s construction-related and we’ve already got a small underwriting agency in the UK in that area and a reasonable size underwriting agency in that area in Australia,” Mr Robinson told insuranceNEWS.com.au.

“It will continue to build the strength and capability in that area in that part of our business.”

The $8.2 million Ensurance UK deal is still undergoing due diligence processes, PSC says.