Mercmut Leaps 79% As Markets Pick Up
The Age
Monday May 29, 1995
The insurance and financial services group Mercantile Mutual benefited strongly from the fall in bond rates and the firmer equity market in the six months to 31 March.
Mercantile yesterday reported an interim 79 per cent lift in after- tax profit of $27.8 million, comprising $27.3 million from its core insurance business and a small unrealised profit of $564,000 from investment of shareholders' funds.
For the same period last year, the group reported a $20.6 million loss on its shareholders' $7 billion funds.
The managing director, Mr Phil Shirriff, said yesterday the April rally in the bond and equity markets pointed to a good result for the full financial year.
He said the result would be in spite of underwriting losses from last month's windstorm on the south coast of New South Wales and the increasing costs of claims in its NSW compulsory third-party motor insurance business.
``We have every reason to be optimistic," he said. ``We are already seeing people moving out of cash and rethinking fixed investments."
The group recorded premium income for the six months of $442 million, including a 34 per cent increase in retail risk premium to $24 million and a 7 per cent increase in retail pooled superannuation income to $64 million.
Premium income in general insurance increased 7 per cent over the same period last year to $185 million.
Mr Shirriff said Mercantile would continue to expand by building on the economies and synergies available in a multi-faceted financial services group.
``Our banking initiative, ING Mercantile Mutual Bank, is performing very well and we have just expanded our workers compensation business as an authorised agent under the new WorkCover system just established in South Australia," he said.
Mercantile Mutual's parent, ING group, has recently reported a 13.5 per cent growth in worldwide profits after tax to $2.1 billion for the year ended 31 December 1994.
© 1995 The Age
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