Steadfast Group CEO Robert Kelly expects insurers to maintain pricing discipline after the company saw a continuation of hard market conditions in its first half.

He says inflation is likely to underpin premium rates into next year, while reinsurance pricing remains supportive following trends towards higher retentions and pricing where loss ratios have been poor.

“There is no laissez-faire underwriting coming in like there used to be in the past,” he said during a financial results briefing yesterday.

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.

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

About 85% of broker network GWP comes from commercial lines and 15% from retail, which compares with about 4% in the early days of the company.

Mr Kelly told the briefing Steadfast had reduced the commission rate on household products to help policyholders with increasing premiums as cost-of-living pressures increased.

“The consumer is paying a hell of a lot more for their house and their car and we have to recognise that there’s a need for the consumer to get advice in those areas, but those products are maybe a little simpler,” he said. “We have a responsibility to say: are we making too much money out of this transaction? And if we are, we will carve a little bit on our commission structure to abate the price increases.”

But Mr Kelly, responding to an analyst question, said the paradigm on the consumer side differs from commercial sector remuneration considerations.

“There is no pressure on us in the foreseeable future or under the discussion about reducing the rem structure for commercial insurance in Australia and New Zealand,” he said.

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 company will meet with US carriers that distribute through ISU next month, as well as meeting with network agencies, and is to provide an update to agencies at a conference in Colorado Springs next month.

Steadfast International CEO Samantha Hollman says the company will be looking at opportunities for trapped capital acquisitions in the US. “We’ve actually already had interest from a couple of the brokers from the ISU network,” she said. “We haven’t officially launched the concept; these were people that are already receiving terms from other people.”