Steadfast’s underlying net profit after tax rose 17.5% to $106 million in the first half, driven by price and volume growth in broking and underwriting agencies, and as the group continued its acquisition activity.

Broking network gross written premium (GWP) grew 14.3% to $6.3 billion while underwriting agencies GWP increased 8.5% to $1.1 billion.

Steadfast acquired northern Queensland specialist Sure Insurance and US-based ISU Group during the half and completed 27 acquisitions of network broker equity through its trapped capital program.

“The hard market has continued without abatement through this half, driving the revenue increases across the group,” CFO Stephen Humphrys told an earnings briefing.

Costs and wage pressures have probably peaked and are starting to come back to more sustainable levels, he says.

Steadfast says it is on target to complete $280 million of trapped capital acquisitions this financial year and will benefit more in the second half from its Sure Insurance and ISU purchases.

Group CEO Robert Kelly says much of the increase in GWP came from price increases, with growth also accelerated by volume gains. On network acquisition opportunities, the company is “nowhere near the end” of the runway.

He says the market remains strong and rates could continue to rise by about 7.5% next calendar year, supported by factors including inflationary effects, attritional claims and continuing strength in reinsurance.  

COO Nigel Fitzgerald says the company has opportunities to improve efficiencies, including through technology, while insurers are likely to remain relatively disciplined on pricing.

“We’ll see at times ebbs and flows in various pockets of the market as they go through competitive pressures, but overall we see a pretty disciplined market moving forward,” he said.

GWP transacted through the Steadfast Client Trading Platform rose 23.8% in the half to $692 million, and Mr Kelly says it “should crack $1.4 billion this year”.

Steadfast has confirmed the upgraded full-year underlying earnings guidance provided in November after its Sure Insurance acquisition. The company continues to expect earnings before interest, tax and amortisation of $520-$530 million and net profit after tax of $240-$250 million.

Steadfast’s statutory net profit after tax in the first half was $100.4 million, compared with $84.7 million a year earlier.