Zurich offloads dealer services arm

Zurich Financial Services has pulled out of the dealer services business, selling its DBOS licensee support arm to Paragem Partners.

According to Paragem Partners managing director Ian Knox, the acquisition makes Paragem, which also purchased Tribeca’s compliance arm in June, one of the largest independently-owned licensee support service groups in Australia.

The former Sealcorp chief executive said the company would continue to provide compliance, paraplanning, software, technical services and practice management support to the 200 licensees, 500 financial planners and 100 insurance brokers who are currently DBOS clients.

Zurich general manager of investment management and life Barry Tomkinson said the sale, which was instigated by Zurich, came as the result of a wider strategy by the firm to divest non-core businesses.

He said as well as DBOS, several divisions had been identified as being peripheral to Zurich’s main objectives, including an area supporting cash management trust operations through Macquarie, which it has handed off to Macquarie, and a national sales force, which has since been restructured.

“We had a lot of time and effort wrapped up in a lot of subsidiaries that clearly weren’t giving us an economic return for the expense and management time,” he said.

Tomkinson said Zurich aimed to concentrate on its main profit centres of general insurance, life risk, investments and platforms.

Zurich chief executive Tom Brown said the sale of DBOS was also important because it distanced support services from the product provider.