Centrepoint Alliance’s insurance premium funding division is expected to deliver a strong result in 2012/13, according to Chairman Rick Nelson.

He says the division reported a net profit after tax of $1.64 million in 2011/12 and has strong profits and cashflows.

“It is noteworthy the company’s insurance premium funding business continues to go from strength to strength,” Mr Nelson says in the annual report.

“Throughout the past two years, and particularly the past 12 months, it has continued to re-grow its business volumes and has generated healthy profits and cash flows.”

Centrepoint reported an after-tax loss of $17.8 million in 2011/12 because of legacy issues with its financial adviser business Professional Investment Services (PIS).

It had to pay $11 million of advice claims against PIS advisers and $1.9 million of external professional fees incurred resolving the cases.

Mr Nelson admits merging Centrepoint Alliance with Centrepoint Wealth, the owner of PIS, has been a challenge.

“Twelve months on, this process has taken a little longer and cost Centrepoint considerably more than anticipated,” he says. “I believe we have made great strides in tackling and resolving… legacy issues.”

Centrepoint had made a total allowance of $22 million for claims from PIS clients at the end of 2011/12, but Mr Nelson believes the advice business is in a position to grow again.

In a revamp of Centrepoint’s structure 25 entities were closed, sold or de-registered, including some adviser-related businesses, funds management operations and overseas firms such as PIS’s Singapore business, which is to be sold to Aviva.