With the S&P/ASX 200 index hitting a four-month low last week, Greenstone’s near $1 billion float will test some nerves.

Greenstone has lodged a prospectus with the Australian Securities and Investments Commission for an initial public offering and June 16 listing on the Australian Securities Exchange.

Based on an indicative price range of $2-2.50 per share, the direct life and pet insurance company’s float is expected to raise $810-$984 million.

Since its formation in 2007, Greenstone has focused on direct insurance products for retail customers, including term life, funeral, income protection, pet and health cover.

Its proprietary brands include Real Insurance, Australian Seniors Insurance Agency, Guardian Insurance and Prime Pet Insurance. It also distributes insurance products through its Choosi comparison website.

Switzer Super Report analyst Penny Pryor writes in NABtrade that the float “has pros and cons”.

She notes Greenstone “white-labels other insurers’ products” to sell to consumers, which means it does not carry the same level of risk as an insurer.

All the claims risk is underwritten by third-party insurers including parent Hollard, Hannover Re and Swiss Re.

“On forecast [financial year 2016] earnings… of $138.1 million, the company would be on a [price-earnings ratio] of between 15.5 and 19 times for the indicative share price range of $2-$2.50,” Ms Pryor says.

“That compares to a forecast [financial year 2016 price-earnings ratio] of 16.8 for iSelect, which Greenstone says is its main competitor in the insurance comparison website space… and a forecast [financial year 2016 price-earnings ratio] of 20.3 for Medibank.

“So it’s probably a little on the expensive side at the high end of the price range and might be worth waiting to see how it trades upon listing.”

An investment bank analyst who declined to be identified told insuranceNEWS.com.au he also doubts the top end of the share price range.

“It will come down to more views around this company and what the market thinks, but the top end of our valuation is not too far above their bottom end in the prospectus,” he said.