Steadfast Group (ASX:SDF): Investors are selling and asking questions later, but are they ahead of themselves?

Time to look at another company that is seeing AI-weary investors selling now and leaving the question asking until later, and today it is insurance broker Steadfast Group (ASX:SDF). Can’t AI do insurance for us, taking into account our interest only and doing so at a fraction of the cost of humans? Investors think so, but this company may have a thing or two to say about that,

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History and Foundation

Steadfast Group was founded in 1996 by Robert Kelly and 43 independent insurance brokerages who recognised that they shared a common problem: individually, they lacked the scale to compete for panel positions with major insurers, negotiate meaningful commission terms, or invest seriously in technology. Kelly’s solution was a network model rather than a merger. Brokers would retain their independence and local identity while pooling their premium volumes, technology infrastructure, and purchasing power under a single group. The concept was straightforward in principle and enormously effective in practice.

The company listed on the ASX in August 2013, raising capital to accelerate acquisitions and further build its technology platform. In the 12 years since listing, it has grown from a domestic Australian network into the largest general insurance broker network in Australasia, with over 414 network brokers, more than 3,000 authorised representatives, and offices across Australia, New Zealand, Singapore, the United Kingdom, Greece, Paris, and most recently the United States. It also holds a 60% stake in UnisonSteadfast, a global broking network spanning 295 members across 113 countries.

The group now includes 29 underwriting agencies, a specialty wholesale broker in London, and nine complementary businesses covering technology, risk, legal, and human resources. It controls approximately $25bn in gross written premium annually, a figure that reflects not just organic growth but a disciplined three-decade acquisition programme.

How the Business Actually Works

Steadfast’s operating model is built on three interlocking segments. The broking network is the largest, consisting of independent general insurance brokers who pay fees to access Steadfast’s technology, insurer panel, and collective negotiating leverage. Steadfast earns fee income from these brokers and, in cases where it holds an equity stake, takes a share of profits. The network’s Australian broker segment generated $6.4bn in gross written premium in the first half of FY26 alone.

The second segment, underwriting agencies, is where Steadfast acts as a product manufacturer rather than a distributor, developing and pricing insurance products across approximately 100 product lines that are then sold through both its own network and external brokers. The third segment, international and complementary businesses, has grown rapidly through acquisitions including ISU Group and Novum Underwriting Partners in the United States. Crucially, 86% of Steadfast’s group gross written premium sits in commercial lines insurance.

This is not an accident. Commercial insurance (i.e. insurance taken out by business) is structurally more complex than personal lines (think of an individual’s health or home and contents insurance). A small business buying a business interruption policy or a construction firm seeking contract works cover cannot easily self-serve online. They need advice, documentation, insurer negotiation, and ongoing risk management support. This concentration in commercial lines is the most important structural fact about Steadfast’s resilience, and it becomes central to any discussion of AI.

Steadfast Group’s Recent Financial Performance

Steadfast’s half-year results for the six months to December 2025, released in February 2026, were operationally solid. Underlying revenue climbed 14.6% to $1.01bn, underlying EBITDA rose 12.6% to $293.6m, and underlying NPAT increased 7.3% to $137.5m. The interim dividend was lifted 5.1% to 8.2 cents per share, fully franked. The Australasian broker network delivered gross written premium growth of 4.4% to $6.4bn, while international businesses recorded a $9.5m uplift in underlying EBITDA driven by acquisitions and organic growth in specialty lines.

The company completed $238.9m in acquisitions during the half, with a further $195m flagged for the second half. Management reaffirmed full-year FY26 guidance for underlying NPATA of $365-375m and underlying EBITDA of $650-665m. The first half is expected to represent approximately 43% of full-year NPAT, with the second half benefiting from expense savings already identified and the full annualisation of recent acquisitions.

The insurance premium environment in Australia was characterised as moderating, with management flagging 2% to 3% premium price growth, softer than the double-digit hardening of recent years, but still a tailwind for revenue. At approximately $4.25 per share, SDF trades on a PE ratio around 14x, with a forward dividend yield near 4.7%, fully franked, undemanding for a business of this quality.

Leadership in Transition

The most significant near-term uncertainty at Steadfast is structural rather than financial. Robert Kelly, who co-founded the business in 1996 and has been its only CEO across its entire public company life, announced his intention to retire in February 2026, with a successor to be named by the release of FY26 results in August. A Spencer Stuart-led search is underway. Kelly is expected to transition to a non-executive director role, subject to election at the next AGM.

This succession follows a difficult twelve months for Kelly personally. In October 2025, he temporarily stepped aside as CEO while an external investigation into a workplace complaint was conducted – an episode that triggered a 10% single-day share price fall. The investigation concluded in November 2025 on a confidential basis, and Kelly resumed his role. The company also navigated the retirement of long-serving CFO Stephen Humphrys, with group financial controller Hannah Lee promoted to CFO. Steadfast has, in other words, reset most of its senior leadership within a twelve-month window. That brings renewal but also execution risk in a period of active acquisition integration.

The AI Question: Threat or Tool?

The question of whether AI poses an existential threat to any trade is being asked, but particularly insurance brokers. Yes, every company in the insurance brokerage game received an unusually sharp market test on 9 February 2026, when US platform Insurify announced an AI-driven quoting tool built on ChatGPT. US-listed broker stocks suffered some of their worst single-day falls since 2008 on the news, a reaction that, on closer examination, was considerably more dramatic than the underlying development warranted. Insurify’s tool is focused on personal lines motor insurance: simple, commoditised, high-volume, low-advice products. Large commercial insurance brokers, including Steadfast, operate at the opposite end of the spectrum.

The structural reality is that AI-native disruption is most threatening where insurance products are standardised and the customer’s primary need is price comparison rather than advice. Personal motor, basic home and contents, straightforward landlord policies — these are categories where AI-powered comparison platforms can replicate much of what a broker does.

This is precisely why Steadfast’s 86% commercial lines concentration matters. A mid-market business seeking professional indemnity cover, a manufacturer managing product liability exposure, or a property developer requiring construction works insurance needs a broker who understands their specific operations, can negotiate bespoke terms with underwriters, and can advocate during a claim. General-purpose AI cannot replicate that relationship or that expertise in the near term.

The more pertinent question is not whether AI threatens Steadfast’s business but whether Steadfast is using AI to extend its competitive advantage — and here the evidence is more substantive. The Steadfast Client Trading Platform (SCTP), developed under Kelly’s leadership, is already the largest quote-and-bind platform globally for SME insurance, handling over $1.4bn in premiums a year.

The company’s response and remaining risks

In July 2025, Steadfast acquired Insurebot, a Brisbane-based technology start-up whose platform automates the insurance quoting process, producing parallel quotes for home, motor, landlord, and workers compensation products in approximately eight minutes — a process that previously took brokers significantly longer. Insurebot integrates directly into Steadfast’s INSIGHT broker management system, which already holds over 7,100 licences across the network. The group’s CTO, David Gillespie, has described this as part of a broader digital strategy designed to enhance broker productivity and consistency rather than to replace broker judgement. That framing is commercially correct: AI that increases the effective capacity of each broker is more valuable to Steadfast than AI that removes the broker from the transaction entirely.

The risk that Steadfast does face from AI is the more subtle one of advisory commoditisation. If the tools deployed across the network produce generic outputs (i.e. standardised coverage recommendations, templated renewal packs, automated proposals that feel indistinguishable from one broker to the next) then the perceived value of broker advice erodes. The SCTP and Insurebot platforms are designed around efficiency, and efficiency tools can, if poorly implemented, flatten the differentiation that justifies broker fees.

Steadfast’s size and data assets, accumulated over three decades across tens of thousands of commercial clients, represent a genuine moat that AI-native competitors cannot quickly replicate. Whether the next CEO understands how to wield that asset strategically, rather than just operationally, is the most consequential question the business faces as it enters the post-Kelly era. It won’t be enough to simply think,’ We’ll be safe just because of what we’ve built up over the past’…it’ll be about wielding existing advantages to build an even stronger moat.

Conclusion

Steadfast is a well-constructed, cash-generative business that has delivered consistent growth for investors since listing. Its operating model – a network that scales without full ownership, concentrated in commercial lines that are structurally resistant to direct AI disintermediation; is more defensible than the February 2026 market reaction to insurance AI headlines suggested.

The near-term financial outlook is credible: guided earnings growth of 6% to 10%, a 4.7% fully franked yield, and an active acquisition pipeline that continues to build mass in Australia and internationally. The legitimate risks are a CEO transition that introduces execution uncertainty, moderating insurance premium growth that reduces the organic tailwind, and a technology strategy that needs to convert productivity gains into margin improvement rather than cost offset. None of these are acute.

Steadfast enters its next chapter from a position of structural strength. The question is whether new leadership can build on it with the same clarity of vision that founded it.