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Promina thrives as share price climbs

Australasian general insurer Promina announced last Thursday (25 March) its first set of annual results since being spun off from Royal & Sun Alliance (R&SA) in an IPO last May.

The group reported net profits after tax of A$298mn for the year ended 31 December 2003, earned from gross written premiums of A$2,976mn and net earned premiums of A$2,441mn.

Promina produced an underwriting result of A$161mn, and a combined ratio of 93.5 percent. The group plans to raise A$250mn to A$300mn in a capital raise in the first half of the year.

Managing director and CEO Michael Wilkins said: “2003 was a challenging and exciting year for Promina Group. We began the year by launching the new brand, Promina, into the marketplace, which was quickly followed by the exacting task of conducting the Promina Initial Public Offering – one of the world’s largest for 2003.

These strong results are testimony to our key differentiator and competitive advantage – our specialist-focused business model. Our 2003 results clearly demonstrate that our strategy of specialisation creates advantage, with all of our uniquely focused and autonomous businesses contributing significantly to the overall profit of the Group.

Promina shares opened at A$1.94 and NZ$2.15 on the Australian and New Zealand stock exchanges in last year’s float, but have since seen their value rocket to A$3.68 and NZ$4.24 respectively, leading some to question whether R&SA undervalued the deal.

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