Breaking News: Major broker network announces bumper results

Breaking News: Major broker network announces bumper results | Insurance Business

Breaking News: Major broker network announces bumper results
Steadfast has released their FY15 results which have been boosted by a series of acquisitions which have seen the business grow.

The broker network saw the GWP placed by Steadfast Network Brokers rise 8% to $4.4 billion as the consolidated revenue of the business rose by 72% to $298.7 million.

Throughout the year, Steadfast announced a series of acquisitions which have helped the company cement its place in the broker market.

Managing Director & CEO Robert Kelly said that it was these deals which saw the company achieve strong growth despite a difficult market.

“Acquisitions transacted during the financial year enabled us to achieve strong growth despite soft market conditions,” Kelly said.

“Each acquisition met our criteria for cultural and strategic fit as well as being cash EPS accretive. Most acquisitions came from within our network or from our long-term strategic partnerships, where Steadfast played a major role in the distribution of their niche products.”

Kelly noted that while acquisitions played a big part in the strong year for the company, the business has taken other steps to ensure its path to growth over the coming year.

“While we have taken advantage of acquisition opportunities during the year, we remain focused on delivering synergies, in particular back office cost savings, to our brokers and underwriting agencies. These savings should materialise in a more meaningful way when the market hardens.”

GWP placed by Steadfast Underwriting Agencies saw a 165% increase to $385 million, compared to pro-forma FY14, as the Calliden and QBE agencies acquisitions saw the annual run rate GWP estimated at around $765 million.

The increases for Steadfast Underwriting Agencies have made the company the largest agency group in Australia.

In New Zealand, the company has made “significant progress,” a statement said, as they look to build their local presence.

“ The Allied Insurance Group, acquired in July 2014, provided us with a local vehicle to provide services to brokers in New Zealand and has increased our share of the general insurance intermediary market to 10% and improved our negotiating position,” a statement from the company said.

“This places us in a strong position to negotiate with Strategic Partners on behalf of our brokers to fund enhancements to their service offering as well as to drive top line growth for both parties.

The launch of Steadfast Direct has seen an estimated $4 million in premiums come to the business as the company “are excited about the prospect of being able to sell competitive retail home and motor products to clients,” a statement said.

For FY16, Steadfast has given a cash EPS growth guidance of between 10-14%, based on particular flat market conditions and no material acquisitions.

This would give a net profit after tax of 480 to $83 million, an increase of between 41-46% as growth will be driven by a full year of benefit from the acquisitions of FY15.