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Steadfast flags continued hard market as earnings grow 

Steadfast says strong pricing has continued to drive revenue in its broking and underwriting businesses and it expects “market discipline” to continue.

The company’s first-half underlying net profit after tax rose 17.5% to $106 million, with broking network gross written premium (GWP) growing 14.3% to $6.3 billion while underwriting agencies GWP increased 8.5% to $1.1 billion.

CFO Stephen Humphrys says the hard market continued “without abatement” in the first half, while cost and wage pressures probably peaked.

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.

COO Nigel Fitzgerald says 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.

Mr Fitzgerald says Steadfast is focused on improvement opportunities within its businesses, and in assets and services such as the Steadfast Client Trading Platform, the risk group and the Insight broker management system.

“Obviously, we’re a very entrepreneurial organisation and inorganic growth is a huge part of our recognised DNA,” he said. “But we’ve been working consistently on looking at our existing businesses and our existing assets and how we mature those to reaching their full potential.”

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

JP Morgan, in a research report, says it has upgraded its fiscal 2025 earnings per share estimate, reflecting more longevity in the insurance cycle than previously assumed, with the strong cycle still boosting revenues.

Steadfast has affirmed guidance – which was upgraded in November – for this financial year and says the Sure and ISU acquisitions will provide more benefit in the second half.