AUB Group has raised its full-year earnings guidance after the business performed strongly in the December half across most divisions, resulting in a 16.7% increase in underlying net profit to $30.6 million during the period.

Its revised projection has underlying net profit at $72-74 million, up from $70-73 million previously.

AUB says the new guidance is based on a number of assumptions including rate rises of 7-9% in Australia.

It says a mixture of strong organic growth and contributions from investments made in the last few years, such as the acquisition of 360 Underwriting Solutions, drove up first-half earnings.

“[The first-half] was an important period for the group,” CEO Mike Emmett said. “We have started to realise the benefits of our investment and focus on the Agencies division, supported by ongoing margin expansion across Australian Broking & New Zealand operations, and a continuation of the growth in both top-line and profitability of Bizcover.”

He says 360 “has exceeded our expectations which is very pleasing” and called the move to invest in the agency in 2020 an “excellent acquisition”.

In the December half, Australian Broking improved its underlying pre-tax profit by 9.5% to $38.3 million, the Agencies division 82.9% to $8.9 million and BizCover 13.6% to $4.9 million.

New Zealand Broking is the only division to return weaker earnings, with underlying pre-tax profit down 20.6% to $3.5 million.

The Australian Broking division achieved a 10.1% rise in commission and fee income to $194.3 million.

CFO Mark Shanahan says Austbrokers’ general insurance commissions are 12.4% higher from a year earlier with approximately 8.1% resulting from premium rate increases.

For the Agencies division, commission and fee income advanced 47% to $41.3 million and BizCover increased its underlying revenue 19.2% to $33.3 million.