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Cover-More’s US expansion pays off

Cover-More’s net profit grew 5.4% to $8.6 million in the half-year to December 31, bolstered by its expansion into the US market and improved margins in Australia.

The travel insurer, which is set to be acquired by Zurich, increased its overall revenue to $110.5 million from $103.1 million in the corresponding period of 2015.

Gross travel insurance sales increased to $304.1 million from $284.7 million, and gross medical assistance sales grew to $34.6 million from $32.8 million.

“It’s a solid start to [2016/17] and we are seeing margins recover in our Australian business, where we hold a market leadership position,” Group CEO Mike Emmett said.

“We expect earnings to continue to build momentum in the second half as we integrate our business in the US and focus on global opportunities for our medical assistance business.”

Net revenue from North America, the world’s biggest travel market, increased to $13.6 million from $11.6 million.

Cover-More completed its takeover of US retail travel specialist Travelex Insurance Services in November and signed up for a partnership with Aon Affinity Travel Practice and Flight Centre USA, having identified the US as a growth market.

Net revenue in Australia, New Zealand and the UK increased to $95.7 million from $93.6 million.

In Asia net revenue fell to $10.3 million from $10.8 million due to initially higher commission rates for some new distributors in India and lower emergency evacuation revenue from China.

Cover-More shareholders will vote late next month or early in April on the $741 million takeover offer from Zurich, announced in December.

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