CBL reports first half operating profit lift of 44%

MEDIA RELEASE
26 AUGUST 2016

CBL reports first half operating profit lift of 44%

CBL Corporation (CBL)’s strong first-half performance to 30th June 2016 has put the company well on track to meeting its full-year profit targets, says Managing Director Peter Harris.

The specialist insurance company reported an operating profit of $35.1 million on gross written premiums of $179.2 million, up 45 percent and up 43 percent respectively when compared to the first six months of 2015. Net profit after tax (excluding foreign currency translation adjustments) was up 33 percent to $21.8 million.

Growth was particularly strong in CBL’s Dublin-based subsidiary CBL Insurance Europe, where operating profit jumped from $0.1 million to $1.6 million, and in the New Zealand-headquartered CBL Insurance.

Mr Harris said the stability of CBL’s combined ratio (a measure of underwriting profitability) showed that the company’s growth was strong and sustainable, and exemplified CBL’s continued aim to focus on quality business and efficient management.

Mr Harris said the half-year results continued a string of good news for CBL following its listing on the New Zealand and Australian stock exchanges in October 2015.

“Since listing, we have paid a maiden dividend of 4.5 cents per share for the 2015 year; comfortably outperformed our IPO forecasts; successfully integrated new acquisitions in Australia, Britain and Mexico; and had our financial strength rating upgraded to A- (Excellent) by international financial ratings agency A.M. Best,” Mr Harris said.

Looking ahead, Mr Harris said strong growth opportunities existed in several overseas markets, particularly Europe, Australia, and South-East Asia.

“We have invested considerable resources over the past six to nine months into developing several new programmes that we expect will generate additional future long term sustainable revenue and profit. We will begin introducing these later this year, and aim to roll them out more broadly in 2017.”

In addition, Mr Harris said CBL’s planned acquisition of Securities and Financial Solutions Europe SA, France’s largest specialist producer of construction-sector insurance and CBL’s largest single client, was tracking well and expected to conclude by early 2017.

Mr Harris said Britain’s decision to leave the EU opened up some interesting possibilities.

“Some of our British competitors appeared to have been caught out by the success of the Leave campaign; CBL’s well-established presence in Europe gives us a considerable advantage should British banks and insurers need to meet stricter licensing criteria in the future,” he said.

Mr Harris said that while CBL had delayed investing in Euro-denominated investments in the lead-up to the Brexit referendum, it continued to look for investment opportunities that would boost the company’s bottom line without materially affecting its solvency margins.

“However, a disciplined underwriting approach and a focus on claims and cost containment remain central to CBL’s strategy for revenue and profit growth across all its business operations.”

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