Centrepoint Alliance’s insurance premium funding business has posted an underlying profit of $2.5 million for the year to June 30, down 52% amid a soft insurance market.

The business was hit by a 10-20% decline in the Australian commercial insurance premium market, Centrepoint says.

“We weren’t particularly happy with the severe downturn in the general insurance premium and the impact that had on our premium funding market,” Centrepoint Alliance MD John de Zwart said. The group’s premium funding result is “down significantly” as a result, he added.

“We lost about $4 million in revenues from the premium price reduction in the general insurance market.” The soft insurance market is not expected to harden in the next six to 12 months, but may improve after that, he told investors in a webinar briefing.

Premiums funded fell 14% to $384 million.

Funding expenses grew 9% to $14.4 million and funding revenue dropped 9% to $17 million.

However, the east-coast funding business grew 21% in a declining market, due to broker numbers rising by 42% since 2013.

Chairman Rick Nelson says it is exciting to see the funding business build new broker relationships following its partnership with Steadfast and the introduction of its New Zealand premium funding operation.

Centrepoint Alliance’s overall net profit after tax gained 78% to $5.9 million, and total revenue fell 5% to $48.9 million.