Centrepoint Alliance insists its premium funding arm has a future with the company, despite speculation it is up for sale.

The group’s premium funding CEO, Bob Dodd, has declined to comment on the speculation, saying the business is focused on growth and development.

However, reliable sources have told insuranceNEWS.com.au the premium funding business has been offered for sale to various parties. Premium funders are struggling in a market dominated by competition, low premiums and falling investment earnings.

Centrepoint Alliance’s lending arm, one of two core operations, provides insurance premium funding through general insurance brokers and mortgage aggregation services to mortgage brokers.

“Lending will continue its strategy of growing the insurance funding business on the east coast,” the group says in its annual report for the year to June 30.

“Substantial investment took place across lending during the period in technology enhancements to ensure we can continue to grow and retain a leading position.

“This will ensure consistent, quality and reliable service over the longer term to all of our business partner relationships.”

Centrepoint says the insurance premium funding market declined 6% last year due to commercial rate reductions.

The business recorded a 22% rise in pre-tax net profit to $2.5 million for the year to June 30 despite the bleak conditions, aided by lower expenses and improved efficiencies.

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

“The premium funding banking facilities have been restructured with improved terms,” Chairman Alan Fisher said. “The fundamentals of the premium funding business are strong, with increased broker numbers and loans written.”