Financial services group Australian Unity’s general insurance group recorded a before-tax profit of $4.29 million for the year to June 30.

The figure is up 66% on last year’s result, with earned premiums after reinsurance at similar levels to last year.

General Insurance Group Executive Warren Lockett told Sunrise Exchange News the insurance division contributed about 15% of the group’s overall pre-tax result of $28.2 million, and he expects the contribution to increase next year.

He attributes the strong result to the division’s ability to sustain its underwriting position in the softening market. He says the Australian Unity general insurance group is a boutique operation focused on forming good relationships with brokers and clients. “We try not to overly compete on price in the market, and concentrate more on products and service.”

Australian Unity is also close to finalising the acquisition of the local general insurance portfolio of NZ rural insurer Farmers Mutual Insurance (FMG).

Mr Lockett says the acquisition will provide a base increase in product and geographical spread for the group. “FMG will become our primary vehicle for growth outside the metropolitan areas.”

The FMG acquisition is expected to be formalised by the end of the year and will contribute $40 million in premium income to the division. This will increase the premium income for the current financial year to about $100 million, then to about $120 million for 2007/08.