Austbrokers has recorded a 2.5% increase in adjusted net profit after tax to $36.3 million, saying 23% of its profit is now derived from non-broking sources.

The broker group’s 2014/15 revenue grew 9.4% over the previous financial year to $217.3 million.

Gross written premium (GWP) across the group increased more than 20%, with Australian brokers registering $2.5 billion, New Zealand brokers $500 million and underwriting agencies $300 million.

Broking commissions and fees grew 3.1% and client numbers rose 4.9%, while income from non-broking sources increased 23%.

Overall broker profit growth was down 1%, reflecting market-wide premium rate reductions of about 9%.

But MD and CEO Mark Searles says Austbrokers Holdings is continuing to experience organic growth in broking, despite the flat market.

“Brokers are saying it’s the worst market in 30 years, so it’s terrific that we’ve continued to build our policy base,” he told insuranceNEWS.com.au. “That places us in an excellent position to capitalise on rising premiums and our diversified business strategy as the market recovers.

“Our recent acquisitions in Australia and New Zealand are already adding value to the overall group and our income diversification strategy is also proving highly successful in both client services and financial terms.”

Under the diversification strategy Austbrokers is investing in companies that specialise in workers’ compensation, injury management and ancillary risk management activities.

Mr Searles says positive signs include a rise in premium funding income due to increased market penetration.

Mr Searles expects premium rates to stabilise next year, but does not expect rises before late in the current financial year.

He says insurers are close to the end of the cycle’s competitive phase, where premiums fall until insurance margins are affected.

“They’ve got the market shares they want and they’re now all in retention mode,” he told insuranceNEWS.com.au. “We’re expecting low single-digit increases.

“In the meantime, we’ve been building our policy base and we’re in a great position for growth across the board as the market improves.”

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