Promina has surpassed market expectations to post a record annual net profit as Australia’s second-largest insurer enters the final stages of its $7.9 billion merger with Suncorp.

Growth in general insurance lines and a stellar performance in its New Zealand financial services division helped push profit to $545 million for the year ending December 31 – up 7.9% on 2005. The market had predicted an annual profit of about $520 million.

Profit in the second half of 2006 was up nearly 20% to $329 million, and the company’s gross written premiums rose to $3.49 billion from $1.22 billion in the first half of the year.

Promina also achieved an insurance margin of 11.7% – nearly 2% points above the group’s minimum expectation. This also represents a record for the group since it was listed in 2003.

CEO Mike Wilkins says the general insurance division grew 11.4%, despite intense competition on personal lines. The NZ financial services arm lodged a 32.4% increase in profit to $45 million.

With the release of Promina’s financial results, the market will now turn its attention to the formation of a new management team under Suncorp CEO John Mulcahy. According to media reports, that’s becoming a tense subject at Promina. Despite the stated need to retain Promina’s top talent, senior executives are still not aware of what Suncorp is offering them to stay.