Centrepoint Alliance’s insurance premium funding arm overcame tough business conditions to record a 22% rise in pre-tax net profit to $2.5 million for the year to June 30.

Business-wide improvements including greater efficiency and reduced expenses helped the company negate the impact of premium declines in the market.

“I am pleased at the overall performance of the premium funding business in another challenging year,” Premium Funding and Lending Solutions CEO Bob Dodd told insuranceNEWS.com.au.

“The soft insurance market continued through to the end of the year, with another 6-7% quoted reduction in premiums over the period. This directly affects the loan amount funded.”

The business’ number of loans grew 2% to 29,023, but average loan value shrank 4% to almost $13 million. Underlying profit before tax grew 12% to $2.8 million, while premiums funded fell 2% to $377 million.

Net margin improved to 2.7% from 2.6% the previous year, and operating expenses were cut by 3% to $9 million.

Management will persist with efforts to improve productivity, Mr Dodd says.

“Technology will play a large part of our agenda throughout the coming months, with new enhanced processes and product development that make life easy for brokers and their customers, while making sure we do not compromise at all on compliance.

“We have also ensured a relentless focus on productivity and costs in all areas.

“This includes a new bank facility that supported the result with improved terms, and we will see the benefit of this coming through in the next year.”

Last month Centrepoint Alliance announced completion of the refinancing of its premium funding bank facility with NAB.

Centrepoint Alliance’s overall net profit fell 28% to $4.3 million for the year, as revenue declined to $41.9 million from $42.3 million.

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