Australia’s biggest general insurance broker network has acquired a “profitable” niche lending business for an undisclosed sum, on the back of a strong half-year result.
Steadfast, which posted a 17.6% profit increase to $38.2 million for the six months to December 31, has lifted its 50% stake in Macquarie Group’s premium funding business, Macquarie Pacific Funding, to 100%, and rebranded it as IQumulate Premium Funding.
Macquarie Pacific Funding was “profitable – not extremely, but it is,” Robert Kelly, Steadfast chief executive, told AFR. “It washes its own washing quite handsomely. We don’t disclose individually, but… it returns a profit margin in line with our other investments.”
Launched as a joint venture with Steadfast, Macquarie Pacific Funding pays insurance companies the full annual premium for business clients upfront, while clients pay back in monthly installments with interest. Some 55% of those customers were through Steadfast brokers.
Last year, Macquarie Pacific Funding forked out $1.5 billion worth of premiums to more than 60,000 customers.
Kelly said Raj Nanra, Macquarie Pacific Funding CEO, will continue to head the newly acquired business, which will remain as an open-product, selling to brokers outside the Steadfast network, AFR reported.