The New Zealand operations of Insurance Australia Group will increase their share of annual premiums from 39% to about 45%.
That's following the $A1.845 billion purchase of the Wesfarmers insurance businesses.
Wesfarmers owns the Lumley operations in New Zealand, which employ about 640 people and account for about 30% of the total transaction.
IAG already owns the NZI, State and AMI brands in New Zealand and claims a 39% share of the $5 billion New Zealanders pay in insurance premiums each year.
IAG New Zealand chief executive Jacki Johnson says the Lumley operations are very complementary to her company's existing businesses both in terms of their geographical spread and product lines.
She says the Lumley operations which were strong in providing commercial motor and commercial property insurance.
Ms Johnson says geographically Lumley is strong from Hamilton through to Auckland with lower exposures in Wellington through to Christchurch, whereas NZI is diversified right through New Zealand.
"One of the things that we had to think about very carefully of course was with New Zealand, given that we see New Zealand as our home market, how we give a commitment to make sure insurance cover for businesses stay in New Zealand."
The transaction is expected to settle in the June quarter next year.
