Rate increases continue in the “mid market” despite talk of a softening environment and falling premiums, Steadfast CEO Robert Kelly has told a results briefing.

He says the segment where Steadfast has most business is still seeing “rate being pushed” by insurers, with exceptions including cyber and some professional indemnity areas.

“In broad terms, it is not a waterfall, it is a moderation and softening of compounding increases that we’ve seen over the past four or five years. Eventually they had to get to technical rating.”

Mr Kelly said there are cases of “Lloyd’s throwing some capital into this market at silly prices”, with impacts in strata, but Steadfast has added Hutch to its client trading platform to support competition. 

Steadfast’s underlying net profit grew 17.2% to $295.5 million last financial year, driven by acquisitions and growth in existing businesses.

The group has stressed its results are not tied to the insurance pricing cycle.

CFO Stephen Humphrys said: “The moderating insurance market conditions have been well publicised, but it was pleasing to see what you might call the first fruits of our performance initiatives come through in the second half.

“We flagged that there would be more moderate revenue growth, but this would be coupled with a moderating expense base, and that showed in our sectional results, particularly in the broking.”

Mr Humphrys, delivering his final report before retirement, noted benefits from trapped capital acquisitions within the network. “We continue to have a strong pipeline of acquisition opportunities, that’s never dried up in the time we’ve been here,” he said.

The company says its acquisition of a majority stake in US-based Novum Underwriting Partners is a key step in building global operations following key transactions in the US and Britain in the past two years.

Steadfast forecasts underlying net profit of $315-$325 million this financial year, based on Australian premium pricing increases of 3%-5%.