Rural service and insurance company Elders is performing well despite financial market volatility, according to parent company Futuris.

Speaking at the Futuris AGM in Adelaide last week, Chairman Stephen Gerlach said Elders Insurance operates on a conservative business model.

Elders Insurance has had no exposure to equity markets, with its investments restricted to interest-bearing cash deposits with Australian banks.

Mr Gerlach says recent reductions to interest rates will impact returns from insurance, but “the critical point” is that Elders Insurance is sound with no exposure to commercial paper, subprime or other factors impacting international financial services operations.

Elders Financial Services results for the first quarter were right on the forecast for the year, Mr Gerlach says.

But considering the “mounting deterioration in the confidence and outlook of consumer markets,” he said this would decrease the future earnings potential for financial services businesses generally.

Elders MD Tim Plant told insuranceNEWS.com.au that despite strong competition, the insurer has managed to maintain top-line growth in line with its expectations.

“This has been maintained through our very conservative investment strategy, which deals largely in cash,” he said. “This has helped our bottom-line position.”