Merger fever hits PNG insurance Industry

The global mergers and

acquisitions fever has hit the PNG insurance industry, which has seen two big names in the local sector move out of companies they have been associated with for many years.

The global acquisition of the Sedgwick Group by the Marsh and McLennan Group has been completed, with former Sedgwick Kassman chair Richard Kassman recently selling his 51 per cent interest in the company to Marsh and McLennan, which is also expected to announce a name change soon.

Kassman has resigned as chair and chief executive of Sedgwick Kassman Ltd, insurance brokers and risk consultants.

The merger also saw former Kila Marsh chair Henry Kila selling his interests in the company and moving to another insurance firm.

Marsh took over the Sedgwick Group last August, creating the largest insurance

broking, risk consultancy and finance company in the world. In PNG, Marsh already owns 52 per cent of Marsh & McLennan, and through the merger acquired Sedgwick’s 49 per cent interest in

Sedgwick Kassman.

After months of negotiation, Kassman, his wife Pole and another Papua New Guinean, Frank Kramer, decided to relinquish their shares in Sedgwick Kassman. Kassman said that he had the option to purchase the shares of his joint venture partner Sedgwick, but was not able to secure a partner, especially foreign investors because of their low perception of PNG as an investment destination.

He said an unstable political climate, combined with high interest rates, had made it impossible to raise the necessary funds to acquire the Sedgwick interest.

“I spoke to alternative partners in Australia, the United Kingdom and the United States, however, sadly extremely

high interest rates and a negative perception of Papua New Guinea weighed against this option,” Kassman said.

Sedgwick Kassman was the first insurance broking firm to have a majority PNG ownership, a feat Kassman is proud of. He said the merged companies would be known as Niu Marsh.

Looking back at his achievements Kassman, who leaves on a trip to Australia today to consider his future, said that as a child, he always aspired to form his own company.

“I achieved this goal seven years ago. I am happy with the financial rewards of my sale, but my trophy from Sedgwick Kassman is firstly the development of a professional insurance broking firm which practiced at international standards.

“The company combined the strengths, skills and technology of leading UK global Sedgwick with a strong Papua New Guinean flavor.” Post Courier ■