Steadfast says profit grew 8.4% in the first half, driven by rising premiums, acquisitions and underwriting agency gains.

Underlying earnings increased to $32.5 million from $30 million in the previous corresponding period, while revenue was 7.8% higher at $269.6 million.

Steadfast Network gross written premium (GWP) gained 8% to $2.6 billion, with Australian portfolio prices increasing 4.4%, excluding statutory classes.

CEO Robert Kelly told insuranceNEWS.com.au financial-year price gains are likely to be 5-7.5% as insurers seek higher returns in areas of recent poor performance. “In some classes they need three years of somewhere between 5-7.5% to get them back to a reasonable loss ratio.”

Underwriting agencies’ GWP grew 16% to $449 million, led by price and volume improvements in property and business lines, as the segment gained an early benefit from the hardening market.

“Underwriting agencies get a lift straight away,” Mr Kelly said. “For the brokers, it sometimes takes 12 months for it to filter through.”

Steadfast bought Whitbread Insurance Brokers and its associated Axis Underwriting Services for $95 million in December and made a number of other smaller purchases in the half. It says the acquisition pipeline remains strong.

“The fact we bought the Whitbread business shows you we look for quality, sustainable businesses that have been around for a long time,” Mr Kelly told a results briefing. “We are not usually involved in anything that doesn’t have a track record.”

The New Zealand network’s GWP gained 12% to $NZ189 million ($176 million). The market there is also turning higher after major weather events, which have followed the Kaikoura and Christchurch earthquakes.

“Some of the pricing in New Zealand is ludicrously low, but definitely we are getting feedback from our brokers that prices are on the rise in property and motor,” Mr Kelly said.

The personal lines Steadfast Direct business, with products underwritten by AIG and IAG’s IAL, has reported a 69% jump in GWP to $66 million. Mr Kelly says the business has grown faster than expected since inception, with the book likely to reach $200 million over three years, against earlier expectations it could take five years.

Steadfast, whose customers are mainly SMEs, says there is fee pressure in larger, high-value accounts amid competition from international brokers.

The company expects margin benefits as the Steadfast Client Trading Platform rollout continues. Nine insurers and underwriting agencies are connected to date, and QBE will go “live” in April.

Steadfast forecasts full-year underlying net profit of $72.5-$77.5 million, reflecting a second-half skew and a greater Whitbread contribution.