Steadfast Group Limited · ASX:SDF
Steadfast — Investor Day (June 2024)
91 slides from Steadfast's investor day presentation, Jun 24, 2024
Slide 1: Investor Day
Steadfast Group Limited (ASX:SDF) Investor Day 24 June 2024 – Sydney 25 June 2024 – Melbourne
Slide 2: Acknowledgement of Country
Acknowledgement of Country We acknowledge the Traditional Owners of the lands on which we meet today, and pay our respects to Elders past and present.
Slide 3: Agenda
9:00 AM Introduction Robert Kelly 9:05 AM International Update Samantha Hollman 9:45 AM International Q&A Samantha Hollman, Nick McKee, Eimear McKeever 9:55 AM Operating Update Nigel Fitzgerald 10:20 AM Q&A 10:30 AM Morning Tea 10:45 AM Sure Insurance Bradley Health 11:05 AM Steadfast Network and SU
Slide 4: Robert Kelly AM
01 Robert Kelly AM Managing Director & CEO
Slide 5: Samantha Hollman
02 Samantha Hollman Chief Executive Officer - International
Slide 6: International Expansion Strategy
International Expansion Strategy International team Steadfast’s international executive team has been formalised: • former Steadfast Group COO Samantha Hollman transitioned to CEO International, • appointment of Nick McKee as COO International; and • promotion of Eimear McKeever to CFO International
Slide 7: International Footprint
International Footprint Responsibility for: UnisonSteadfast - Germany USA Singapore London New Zealand 7
Slide 8: Steadfast Placements
Steadfast Placements London and Australia • Steadfast Placements is an experienced team of wholesale placement brokers, part of the Steadfast Group • Team located in Australia and London • Specialise in placing large limit, high value and complex risks, within the UK insurance markets London • Stead
Slide 9: UnisonSteadfast
UnisonSteadfast Global network headquartered in Germany 700+ Referrals between Steadfast Network brokers and Steadfast Group has an equity ownership stake of UnisonSteadfast 60% in UnisonSteadfast • One of the world’s largest global general insurance broker networks, offering multi-jurisdictional Un
Slide 10: Broker Networks: New Zealand
Broker Networks New Zealand 66 brokers in the Network approx. NZ$800m of GWP in CY23 Future focus • Steadfast Underwriting Agencies • Grow Network, partners & products building market presence • Develop new capacity/markets – including - 4 operational Steadfast Underwriting Agencies • Strong buy-in
Slide 11: Broker Networks: Singapore
Broker Networks Singapore Asia • Targeted Singapore initially • 30 brokers in the Network • Strong buy-in from insurer partners - 9 insurer partners Broker offices - pay Professional Service fees footprint Future focus - use Steadfast agreed wordings • Grow Network, partners & products • Steadfast U
Slide 12: Broker Networks: United States of America
Broker Networks United States of America In October 2023, Steadfast acquired 100% of an agency network, ISU Group in the United States of America ISU Group • Established in 1979 (ISU Insurance Agency), ISU Network established in 2000 ISU Snapshot: • One of the largest and most reputable insurance ag
Slide 13: Market Opportunity
Market Opportunity United States of America Expansion into the US market will present us with opportunity to deliver our strategy and unique business model to a significantly larger market. While this is an exciting opportunity, the complexity of the market dynamics requires a measured evaluation pe
Slide 14: Market Opportunity
Market Opportunity United States of America Source: S&P Report Insurance Brokers And Servicers Sector View 2024 14 Copyright © 2024
Slide 15: Market Opportunity
Market Opportunity United States of America M&A Opportunity in the US – U.S. insurance agencies completed over 700 deals in 2023 Highly fragmented Despite robust M&A activity in the space for well over the last decade, there are still thousands of independent insurance agencies operating in the U.S.
Slide 16: Vision and Strategic Priorities
Vision and Strategic Priorities ISU Group Network Our vision is to be the network of choice for independent insurance agencies in the United States, delivering comprehensive services and solutions to support agency perpetuation, Grow our Expand our Evolve our Membership Services and Organisation com
Slide 17: Vision and Strategic Priorities
Vision and Strategic Priorities ISU Group Network Quality over quantity Retain integrity of agency vetting process and strong ISU reputation Grow our Expand our Evolve our Membership Services and Organisation Solutions New Member Sales Acquisitions and Partnerships Enhance Member Retention 17 Copyri
Slide 18: Vision and Strategic Priorities
Vision and Strategic Priorities ISU Group Network Grow our Expand our Evolve our Membership Services and Organisation Solutions Carrier Relationships Trapped Capital Preferred Arrangements Wholesale and London Placement Technology Solutions Health and Benefits MGAs Premium Financing Other Business S
Slide 19: Vision and Strategic Priorities
Vision and Strategic Priorities ISU Group Network Grow our Expand our Evolve our Membership Services and Organisation Solutions Structure, Roles and Responsibilities Talent Management Marketing and Communications Operational and Financial Management 19 Copyright © 2024
Slide 20: Priority Focus Areas
Priority Focus Areas ISU Group Network AGENCY MARKET ACCESS PERPETUATION NETWORK TECHNOLOGY ISU Network GROWTH SOLUTIONS 20 Copyright © 2024
Slide 21: USA Summary
USA Summary Potential future runway of opportunities for Steadfast to capitalise 1. Continue to evaluate USA/ISU opportunity. 2. Progressing well financially, operationally and strategically. 3. Positive support from members, carriers, and staff. 4. Potential is vast, approaching in a considered way
Slide 22: International Q&A
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Slide 23: Nigel Fitzgerald
03 Nigel Fitzgerald Chief Operating Officer
Slide 24: Nigel Fitzgerald
Nigel Fitzgerald Nigel Fitzgerald joined Steadfast Group in April 2023 as Chief Operating Officer of Steadfast Group. Nigel has worked in the insurance industry for over 25 years with a proven track record in leading profitable and strategically dynamic businesses on a global basis, including fulfil
Slide 25: Industry dynamics
Industry dynamics <> Steadfast THE STRENGTH YOU NEED
Slide 26: Ongoing validation of our core strategic focus
Ongoing validation of our core strategic focus - broking, MGA's and geographical expansion 1. The value of the broker continues to increase AU intermediated market share • Insurance industry complexity for customers and insurers remains high is growing versus the direct • Lack of trust of insurance
Slide 27: The value of the broker continues to increase by providing customer advocacy
The value of the broker continues to increase by providing customer advocacy Insurers have a lot of priorities to juggle which increases a brokers value: Increased Prudential Conduct regulation / 44% of consumers do not regulation and Shareholder societal pressure to limit trust insurance companies
Slide 28: The value of the broker continues to increase and remains a good investment
The value of the broker continues to increase and remains a good investment The Australian intermediated GI market has grown to $37b GWP and 53% overall (versus 44% in FY15) 80.0 Strong growth in CAGR profiles across the intermediated market and Steadfast’s network market share 69.2 70.0 61.6 55.9 6
Slide 29: Insurer discipline expected to remain
Insurer discipline expected to remain Loss ratios are still not adequate, and insurers will have to continue to increase rates Source: Finity Optima Report 2023 29 Copyright © 2024
Slide 30: Our market leading value proposition provides strong organic and in-organic growth levers
Our market leading value proposition provides strong organic and in-organic growth levers Our long-term strategy of focusing on being the best broker network leads to – • Client acquisition growth • Provides a strong exit mechanism to unlock trapped capital • Increases our partnership value to Insur
Slide 31: Organic growth drivers
Organic growth drivers Copyright © 2024
Slide 32: A strong focus on capabilities to support margin initiatives
A strong focus on capabilities to support margin initiatives As we continue to grow our unique owner operator decentralised model, we are introducing more capabilities to apply our rich insights and best practices across our Network SUBSIDIARY PERFORMANCE UPSKILLING & MARGIN OPTIMISATION OPERATIONAL
Slide 33: Maintaining our technology competitive advantage
Maintaining our technology >$1.4b and +24.7% growth competitive advantage GWP transacted and yoy growth rolling 12 months to 19 June 2024 Our suite of technology $5.3b offers core system SCTP total addressable market advantage, enables a demonstrates long runway of contestable opportunity marketplac
Slide 34: Aligning Executive oversight of our Australasian Network(s)
Aligning Executive oversight of our Australasian Network(s) Future proofing and enhancing our value proposition across our Australasian Networks Singapore 30 Brokers >$109m GWP (CY21) Australia 426 Brokers $11.6B GWP Nick Cook (CY23) Executive General Manager Networks, Broker and Insurer Services, A
Slide 35: Our Executive team welcomes 3 new members
Our Executive team welcomes 3 new members Steadfast has attracted exceptional talent from diverse sectors across the Industry to drive the effective execution of our 3-year strategy Mark Senkevics Meagan Jeffery Noelene Palmer Executive General Manager Executive General Manager Executive General Man
Slide 36: Maximise the strength of Steadfast: Strategy 2024-2027
Maximise the strength of Steadfast: Steadfast Group Strategy 2024-2027 OUR VISION OUR MISSION OUR PURPOSE OUR VALUES Continually growing shareholder Deliver valued and differentiated Together we strengthen the future value by running market leading service to our customers and of our people, busines
Slide 37: Disciplined strategic execution and financial management frameworks
Disciplined strategic execution and financial management frameworks to support strategy 25-27 ‘Earnings’ Strategy Framework Organic Growth and Margin Improvement Inorganic Growth Disciplined acquisition strategy to support long term Deliver organic revenue growth growth and returns • Customer acquis
Slide 38: Q&A
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Slide 39: Morning Tea
Morning Tea <3> Steadfast
Slide 40: Bradley Heath
04 Bradley Heath Sure Insurance – Managing Director Copyright © 2024
Slide 41: Company History
Company History Sure has grown rapidly to become a leader in Home and Contents insurance in Regional Queensland 2019 2024 2020 Commenced Strata Binder Axa XL 2018 Sure begins operations, with first 2023 offering Strata capacity and Founded by policy sold to Lloyd Enters into Cyclone geographic Bradl
Slide 42: Strategic Advantages
Strategic Advantages Nationally scalable and unique operating model underpinned by Sure’s multi-pronged strategic initiatives and advantages – Insurance “Lite” model 1 Pricing And Risk Selection Excellence 5 Cyclone Reinsurance Pool Sophisticated insights driving ability to provide more Sure is
Slide 43: Highly Recognised Insurance Brand
Highly Recognised Insurance Brand Sure has established a well recognised insurance brand demonstrated through its strong word of mouth in region and ability to retain existing customers Highly Leverageable Insurance Brand Deep Understanding Significant Brand Strong Reputation and Established Brand o
Slide 44: Current Priorities
Current Priorities Targeted continuous improvement activities to further strengthen organisational capability and capacity across the insurance value chain. 1 2 3 People, Processes Event Finalisation – Jasper & Systems – Continuous and Kirrily - implement future Growth – Duality of Organic and Impro
Slide 45: Why Steadfast?
Why Steadfast? Capability & capacity to drive national expansion using scalable Sure systems and processes 1 Expansion, capability and capacity – specifically: Steadfast Broker network SCTP Insurer relationships Operational efficiencies through systems and support 2 SCTP & National Broker Ne
Slide 46: Cyclone Jasper and Kirrily Impacts
Cyclone Jasper and Kirrily Impacts First major event for Sure - valuable and positive learnings implemented across people, processes and systems Stretched operational capacity and resources have been ramped up – Jasper 1,900 claims - Kirrily 1,200 claims. Event learnings have driven positive cla
Slide 47: Multiple Actionable Growth Levers – Horizons
Multiple Actionable Growth Levers – Horizons Sure is capitalising on several actionable growth opportunities with significant work already completed or underway. Opportunities available to turbocharge growth with additional investment using scalable pricing, claims and systems assets Initiatives & H
Slide 48: Nick Cook
05 Nick Cook Executive General Manager – Networks, Broker and Insurer Services, Asia Pacific
Slide 49: Nick Cook | Executive General Manager
Nick Cook | Executive General Manager Nick Cook Nick has spent most of his career on the Insurer side, focusing on broker distribution, segmentation & product to market. This experience together with time spent working in Regional, Metro & National markets has provided Nick with strong insights to t
Slide 50: Our unique advantage
Our unique advantage <> Steadfast THE STRENGTH YOU NEED
Slide 51: Focussed on being the best broker networks across APAC
Focussed on being the best broker networks across APAC We genuinely focus on improving the value Steadfast brings to our broker network, ensuring their clients have access to the best advice, access to markets & support at the time of a claim. Steadfast is unique in the level of services provided to
Slide 52: Broker Networks
Broker Networks Australia, New Zealand & Singapore Future Focus Bringing a uniform approach to our networks across - Services - Carrier Management - SCTP - Trapped Capital - Compliance & Regulatory - Technology - Agencies 52 Copyright © 2024
Slide 53: MGA's | Filling the gap
MGA’s | Filling the gap <> Steadfast THE STRENGTH YOL NEED
Slide 54: MGA's | No longer in the shadows of the Insurers
MGA’s | No longer in the shadows of the Insurers The rising sophistication of the MGA model presents an attractive, trusted, efficient way in which Insurers can deploy capital into segments they could not nimbly target themselves We’re seeing a Brokers choosing MGA's changing balance over Insurers d
Slide 55: Changing Market Demographics
Changing Market Demographics We are seeing an ongoing rebalancing from Insurers towards MGA’s Insurers are challenged by lack of service, risk appetite, people & systems Capacity Source Premium Policy Movement % Share of SDF YoY % Change Movement Portfolio Insurers | Top 8 9.6% -4.5% 47.8% -4.9% Ins
Slide 56: Platforms | The place to be
Platforms | The place to be <$> Steadfast THE STRENGTH YOU NEED
Slide 57: Platforms | The Preferred choice
Platforms | The Preferred choice Providing choice of market, broader choice of products & markets together with quality wordings on a contestable platform align with evolving generation & distribution changes We’re seeing the The transition across generations accelerating migration of & distribution
Slide 58: Our Regulatory Environment
Our Regulatory Environment <> Steadfast THE STRENGTH YOU NEED.
Slide 59: The regulatory environment is expected to be relatively benign post the QOAR Review
The regulatory environment is expected to be relatively benign post the QOAR Review Legislation in respect to commissions has been redrafted, NIBA recently addressed the Senate committee in support of the redrafted legislation We are seeing complete change in the Expect to see leadership greater ind
Slide 60: Overview of main changes affecting agencies
Overview of main changes affecting agencies 1 July 2025 – CPS230 in force 1 July 2026 – Transition period ends for existing service provider contracts CPS230 provides an opportunity for smaller agencies to join Steadfast Operational Risk Business Continuity Management of Service Management Managemen
Slide 61: Wayne Tower
06 Wayne Tower Chief Executive Officer - IQumulate Premium Funding
Slide 62: Agenda
Agenda Product, Market & Company Overview Funding Regulatory, Compliance & Risk Management Copyright © 2024 62
Slide 63: Product, Market & Company Overview
Product, Market & Company Overview 63 Copyright © 2024
Slide 64: Insurance Premium Funding
Insurance Premium Funding Short term finance facility that enables borrowers to manage payments for a range of insurance policies via instalments. Majority of borrowers are business entities across Australia & New Zealand (75% by loan count and 96% by amount financed). Loans are originated on
Slide 65: Organisation Structure
Organisation Structure Board of directors in place with directors’ background spanning insurance broking, underwriting and commercial lending Risk Committee comprises 3 external members and business delegates Experienced management team with business tenure ranging from 4 – 16 years leading al
Slide 66: Business Model / Distribution Strategy
Business Model / Distribution Strategy Majority of product distribution via insurance brokers Open market business – IQumulate competes within several non-Steadfast distribution channels: Self licensed brokers Authorised representatives International brokers Highly automated, technology
Slide 67: Funding Facilities - AU
Funding Facilities - AU A$660M credit rated (Moody’s) warehouse in place to support funding requirements of our Australian business, involving multiple participants: Tranche Participants % $M Senior Two major banking institutions 87.2% 575.5 Mezzanine Industry Funds Management 10.6% 70.0 Equity /
Slide 68: Funding Facilities - NZ
Funding Facilities - NZ NZ$75M corporate loan provided by ANZ 12-month tenor (to May 2025) Secured against NZ receivables book of IQumulate Funding Services Ltd with no recourse to other group entities Similar to Australian warehouse, corporate loan includes ongoing covenants to measure obli
Slide 69: Regulatory, Compliance and Risk Management
Regulatory, Compliance and Risk Management 69 Copyright © 2024
Slide 70: Governance & Compliance
Governance & Compliance Risk Appetite Statement approved by IQPF Board and monitored quarterly. Risk Appetite Monitored metrics encompass financial, operational, IT, regulatory, compliance and reputational risks. Board approved delegation of authority in place to support decisioning with separation
Slide 71: Regulatory & Reporting Requirements
Regulatory & Reporting Requirements ASIC Product Design & Distribution Obligations (Domestic / Consumer) National Consumer Credit Protection Act (Operating under relief instrument from selected obligations) NZ Commerce Commission Credit Contracts and Consumer Finance Act (Exempt from some aspe
Slide 72: Risk Management Framework
Risk Management Framework Risk appetite & scorecard reviewed at quarterly board meetings Monthly risk update provided to board with risk report created and published internally each month Risk & control register maintained with external review recently completed Credit bureau integration int
Slide 73: Consolidated Arrears Performance
Consolidated Arrears Performance – 5 Years 15 - 59 Days (RHS) 60 - 89 Days (RHS) 90+ (RHS) Total 15+ % (LHS) 1.60% $8.0 1.40% 1.20% $6.0 1.00% 0.80% $4.0 0.60% 0.40% $2.0 0.20% 0.00% $0.0 Jan-19 Sep-19 Jan-20 Sep-20 Jan-21 Sep-21 Jan-22 Sep-22 Jan-23 Sep-23 Jan-24 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Slide 74: Strategy
Strategy Short term focus remains AU & NZ markets with year-on-year 10%+ revenue growth targets and EBITDA margin improvement Sufficient scale available through operating platform to ensure growth will be highly earnings accretive Medium term strategy now in place with 3 key focus areas: Gro
Slide 75: Thank you
Thank you Wayne Tower wayne.tower@iqumulate.com iqumulate.com Copyright © 2024
Slide 76: Helen Tebelopoulos
07 Helen Tebelopoulos Goldseal - General Manager, Operations Compliance and Customer Experience
Slide 77: What we do
What we do Compliance & Customer Experience Steadfast Audit & Education & HR Services Agencies Compliance Training Compliance 77 Copyright © 2024
Slide 78: Why we do it
Why we do it Corporations Act ASIC Act Insurance Contracts Act Privacy Act Insurance Broker Code of Practice Steadfast Code of Conduct General Insurance Code of Practice Fair Work Act Workplace Health & Safety Acts 78 Copyright © 2024
Slide 79: Audit and Review Program
Audit and Review Program Examines management and corporate governance systems for effectiveness and compliance with financial services legislation Evaluates adequacy and suitability of systems for managing business operations Establishes recommendations for remediation and improvement opportunities
Slide 80: Helplines: Compliance Helpline
Helplines Compliance Helpline Top 5 Topics: Regulators Over 642 queries FY24 YTD CCX360 Authorised Representatives Obligations to clients Financial Services Guide 80 Copyright © 2024
Slide 81: Helplines: HR Helpline
Helplines HR Helpline Top 5 Topics: Contracts of Employment Over 662 queries FY24 YTD Performance Management Termination Leave – Personal/Carers HR Materials 81 Copyright © 2024
Slide 82: Steadfast Learning Hub - FY24 YTD
Steadfast Learning Hub - FY24 YTD 74,746 of CPD issued 19,726 courses completed via the Learning Hub Popular courses: - Insurance Brokers Code of Practice - Supporting Vulnerable Clients 30,050 webinar - Advising Retail Clients certificates issued - Breach Reporting - Effective Complaints Handling 8
Slide 83: Stephen Humphrys
08 Stephen Humphrys Chief Financial Officer
Slide 84: Steadfast Group's share of growing Network GWP
Steadfast Group’s share of growing Network GWP Consistently increasing the size of the Steadfast Network and equity ownership 12 50% 45% 10 40% $6.0b 35% Equity percentage ownership 8 $6.9b Steadfast Network GWP ($b) 30% $6.7b 6 25% $5.7b 20% 4 $3.9b $3.6b 15% $3.5b $3.1b $3.2b $5.6b $2.9b $3.1b 10%
Slide 85: Australasian Network acquisition opportunities
Australasian Network acquisition opportunities Potential to acquire c.$435m1 EBITA from current Australasian Network and equity brokers CY23 Steadfast Network GWP = $12.4b Non-equity GWP Equity brokers Assumed not GWP available for $4.3b owned Trapped Capital $1.7b co-owned $2.3b Potential EBITA of
Slide 86: Robert Kelly AM
09 Robert Kelly AM Managing Director & CEO
Slide 87: Delivering on IPO strategy of organic and acquisition growth
Delivering on IPO strategy of organic and acquisition growth Steadfast remains well positioned to continue delivering sustainable growth 1. Premium pricing market remains strong 2. Organic growth strategies being implemented, regardless of premium cycle 3. Trapped Capital acquisition pipeline is rob
Slide 88: Q&A
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Slide 89: Lunch
Lunch
Slide 90: Important Notice
Important Notice This presentation has been prepared by Steadfast Group Limited (“Steadfast”). This presentation contains information in summary form which is current as at 24 June 2024. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offered by
Slide 91: Thank you
Thank you <$> Steadfast THE STRENGTF YOU NEED