Lloyd's insurer Beazley Group is significantly expanding its presence in the Australian group disability market through an agreement to purchase Australian Income Protection (AIP) and Blue-GUM Special Risks (Blue-GUM).

Since 2003, AIP has built a successful business specialising in providing group disability insurance to industry superannuation funds. The agency underwrote gross premiums of AUD$30 million in 2010. Blue-GUM, a smaller firm, focuses on the distribution and management of life insurance-based group disability and death benefit policies. Blue-GUM underwrote gross premiums of AUD$2.6 million in 2010, and has also been successful in selling access to its underwriting, claims and policy administration software.

Beazley plans to combine the two companies with its existing Australian accident and health business as part of the Beazley Group, creating a business able to offer a full product range, including permanent and temporary disability benefits, to superannuation funds, employers and affinity groups. The transaction is subject to regulatory approval in Australia and the United Kingdom.

Beazley's current presence in the Australian accident and health insurance market derives from its acquisition in 2008 of Momentum Underwriting Management, an MGA focusing on life, accident and health business. Following the latest acquisitions, Beazley will merge its current Brisbane offices with AIPs and acquire a new office in Sydney.

Chris Branch, head of Beazley's life, accident and health division, said:

"We have worked closely with the management of AIP and Blue-GUM for a number of years and have enormous respect for the quality of the business that they have built. We see great opportunities to continue to work with them as colleagues to grow the business further."