Mercmut On Track With 80pc Lift
Sydney Morning Herald
Monday May 29, 1995
Insurance and financial services group Mercantile Mutual - now part of the ING Group which recently picked up gutted UK investment bank Barings - bounced back with an 80 per cent lift in after-tax profit to $27.8 million in the six months ended March 31, due to good performances in both investment markets and its core businesses.
The latest six months, which Mercantile Mutual managing director Mr Phil Shirriff said had been built upon since the end of March as the All Ordinaries broke through the 2000 barrier, indicated the worst was over for the financial services industry.
Mr Shirriff said the group recorded unrealised profits after tax of $564,000 from investment of shareholders' funds, compared with $20.6 million in losses for the same period last year. All core businesses - super, life insurance and banking - were turning in operating profits, he said.
The group recorded premium income for the half of $442 million, which included a 34 per cent jump in risk premiums to $24 million and a 7 per cent rise in general insurance premiums to $185 million.
The only disappointing area was sales of investment products, which were down on the previous year following leakage of funds chasing cash and term deposits. Mr Shirriff expected the full-year result to continue upwards despite incurring underwriting losses from last month's windstorm on the NSW south coast and the increasing cost of claims in compulsory third party motor insurance in NSW.
"We have weathered the storm in financial markets and we are now seeing the stronger investment results reflected in returns to investors and policyholders, as well as the group's bottom line," Mr Shirriff said.
He added that Mercantile Mutual was continuing to expand by building on the economies and synergies available in a multi-faceted financial services group with the support of its worldwide parent.
Mercantile Mutual recently expanded its workers compensation business as an authorised agent under the new WorkCover system established in South Australia.
© 1995 Sydney Morning Herald
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