Mr Bailey had been acting as interim CEO since former CEO Brett McKeon stepped down from his full-time executive role in March.
The new CEO has been with AFG for more than 13 years and had previously held the roles of chief financial officer and chief operating officer.
Mr Bailey has had direct responsibility for the company’s business development, strategy and finance operations as well as leading the AFG Home Loans business and securitisation programme.
According to AFG chairman Tony Gill, Mr Bailey was identified as the “preferred candidate” following a review of the market.
Mr Gill commented: “David’s skills and background are ideally suited to the role of AFG CEO.
“Importantly, having worked closely with our former CEO Brett McKeon (both prior to Brett stepping back and also since David’s appointment as interim CEO), he is well known to AFG’s brokers, business partners and shareholders.”
Mr Gill concluded: “David has been very effective in the interim CEO role and the board looks forward to the ongoing growth of the company as David and the AFG executive team work together to maximise the opportunities for the business.”
Speaking of his appointment, Mr Bailey said he was “delighted to have been affirmed in the role,” adding: “AFG is a great Australian success story. We have a fantastic culture, breadth of market reach, deep capability and a focused strategy that has driven our success.
“We are in an exciting and important phase of AFG’s development and I look forward to steering AFG further down the path of diversified growth whilst also ensuring the core broker proposition of choice, competition and strong consumer outcomes is maintained.”