Insurers facing lower premiums

At its annual meeting insurance broker Austbrokers announced some small acquisitions in New Zealand, which are expected to increase earnings per share by 2.5% on an annualised basis. More importantly, though, the company can’t rely on higher premiums to boost profits as the massive increase in response to the string of natural disasters in 2011 is at an end.As an insurance broker Austbrokers acts like a toll bridge for insurance premiums, so lower policy premiums will be a headwind for revenue growth despite the company showing recently that it can increase profits without higher premiums.Management will lay out its full...

At its annual meeting insurance broker Austbrokers announced some small acquisitions in New Zealand, which are expected to increase earnings per share by 2.5% on an annualised basis. More importantly, though, the company can’t rely on higher premiums to boost profits as the massive increase in response to the string of natural disasters in 2011 is at an end.

As an insurance broker Austbrokers acts like a toll bridge for insurance premiums, so lower policy premiums will be a headwind for revenue growth despite the company showing recently that it can increase profits without higher premiums.

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