Soft commercial insurance market hits Centrepoint Funding

A decline in the commercial general insurance market over the past year has cut into Centrepoint Alliance's premium funding earnings.

Centrepoint Alliance is better known as a financial planner but its finance subsidiary, Centrepoint Funding, is a specialist lender offering companies and individuals finance for their insurance premiums. Business is sourced through insurance brokers.

Centrepoint Funding's underlying profit for the year to June fell 52 per cent to A$2.5 million. The company funded 28,000 premiums worth $384 million - a 14 per cent reduction.

According to the company, Australian commercial general insurance premium volumes were down as much as 20 per cent last financial year. The main area of weakness was in Western Australia.

Centrepoint Funding has responded to the weaker market by expanding its distribution network. It increased the number of brokers it works with by six per cent.

It also took steps to reinvigorate a small mortgage broking business it operates, settling $4 billion of loans, and launched a premium funding business in New Zealand.