Steadfast is projecting the business will perform even better this financial year as it reported pre-tax earnings at the higher end of its pre-virus guidance for the 12 months to June 30.

The country’s largest brokerage network also announced MD and CEO Robert Kelly will run the business until after the AGM in October 2023, extending his tenure by several months. He had previously committed to stay on until the end of 2022.

Steadfast says underlying earnings before interest, tax and amortisation (EBITA) in the last financial year rose 15.5% to $223.5 million, which is at the top tier of its $215-225 million forecast.

The underlying EBITA forecast was cancelled after the pandemic erupted in late March but subsequent updates showed trading conditions remained strong, placing the business in a good position to meet the targets.

For this financial year Steadfast has flagged underlying EBITA of $235-245 million and underlying net profit after-tax of $115-122 million, which if achieved, would exceed the $108.7 million earned in the 2019/20 fiscal year.

The guidance is subject to uncertainties over how the pandemic disruption will impact long-term economic growth but Steadfast believes the last quarter has demonstrated the resilience of its broking business.

“I can tell you I have no idea what’s going to happen in the second half of FY21 financial year,” Mr Kelly said this morning in a post-earnings conference call. “What I can tell you is… we put out what we think we can actually achieve regardless of the impact of what is occurring out in the market.

“And I rely on our track record over the last seven years for you to say ‘can we believe these people or not’.”

As previously flagged the business recorded a statutory net loss of $55.2 million, impacted partly by the requirement to expense the $72.7 million acquisition cost last year of Insurance Brokers Network Australia (IBNA).

IBNA has provided an immediate boost to the Steadfast Network, which achieved a 34.8% jump in gross written premium to a record $8.3 billion. IBNA chipped in 21.6% of the division’s GWP growth increase.

Steadfast Underwriting Agencies increased its GWP by 13.1% to $1.33 billion, buoyed by hardening rates and organic growth.

On the hardening rate landscape, Mr Kelly says the directors’ and officers’ market remains a “you take what you can get” situation.

Overall the financial lines segment has seen tripling and even quadrupling of rates at renewals, he said, adding some sections of the professional indemnity line “are moving quite dramatically”.

He says he will “watch with interest” the business interruption (BI) test case that will go before the NSW Supreme Court, which will decide if outdated policy wordings on pandemic exclusions should apply to COVID-19 claims.

The BI test case involves two separate business claims with Hollard and HDI Global Specialty that were lodged with the Australian Financial Complaints Authority as part of its dispute resolution process.