Ageing advisers create insurance opportunity for Mike Pero
Mike Pero Mortgages has announced plans to establish a national risk insurance business, and sees strong growth in its core business in the current 2005/06 year.
Wednesday, November 2nd 2005, 9:49PM
Mike Pero Mortgages has announced plans to establish a national risk insurance business, and sees strong growth in its core business in the current 2005/06 year.
MPM chairman George Gould told shareholders at the company's annual meeting in Christchurch the trading surplus in the three months to September 30 was well ahead of the same period last year.
For the year to June 30, 2005 MPM's net surplus after tax was $1.617 million.
"In fact we expect the net surplus after tax for the year to June 30, 2006 to be satisfactorily ahead of the year under review, and the outlook is therefore positive.''
Gould said in the coming year the MPM broker network would be extended to regional areas.
"The size and extent of the broker network is the most obvious and immediate way to increase our earnings.''
MPM chief executive Jeff Staniland said in the last year MPM had launched five new franchises and now had 41 and the number of brokers totalled 51.
The company was now changing its model from the position where only one broker who owned the franchise could operate it.
"We've extended that model and given these people the opportunity now to take on what we call a loan monitor - particularly to we hope clone themselves. So ... not bringing new people in and growing them but helping the established people grow,'' he said.
Staniland said over the financial year MPM's average monthly number of loans had been maintained during a time of declining sales volume in the housing market.
"The housing market in the last financial year did decline ... so some of our (loans were) effectively market share growth.''
He added average loan sizes had increased. Gould said mortgage deal sizes and volumes were up offsetting any losses from the removal of trail payments by many of the banks or lending institutions.
"In the main they're not paying it but what they are doing is paying more upfront commission. So that has quite an implication on the earnings projection moving forward. It is probably seen as a negative influence but is actually very positive in the short term if you imagine getting more money upfront."
Gould said MPM had looked at acquisition opportunities "but nothing has quite measured up".
He added the company would look for acquisition opportunities in its new insurance broker business.
Staniland said the company saw a strategic opportunity for MPM to establish New Zealand's first national brand for risk insurance broking to trade as Mike Pero Insurances Ltd.
The business would provide risk insurance broking for life, income protection and health insurance. Fire and general would also be available but was not the main focus.
Staniland said the Mike Pero Insurance brokers would also asess the needs of their clients on a regular basis to ensure that they were adequately covered as their circumstances change.
There are currently five insurance brokers working at Mike Pero Mortgages (two each in Auckland and Christchurch and one in Wellington), but until now they have only taken internal referrals from Mike Pero Mort gages brokers.
"Our strategy is to establish the Mike Pero Insurances brand in its own right, and engage or train a number of new insurance brokers to work in a number of Mike Pero Mortgages franchises,'' Staniland said.
"We have a five-year plan to establish and grow the Mike Pero Insurances business, and would expect to have around 19 or 20 insurance brokers by that time."
Staniland said at present in New Zealand there were around $130 million in new risk premiums written each year. These were ar ranged through around 3000 existing independent brokers, many of whom are approaching retirement and also have to deal with increasing levels of regulation and compliance.
"We are not just planning on taking a significant share of risk insurance premiums, we are looking at growing the insurance risk market given the level of under-insurance in New Zealand," he said.
He said the company had exceeded its prospectus earnings and the share price which had last year languished between 60 cents and 70 cents painted MPM as a yield stock rather than a growth stock, although the company was ahead of prospectus forecasts.
"Our financial performance has been what we said it was going to be and better.'' Gould said he remained a committed director and cornerstone shareholder of MPM.
| « Very special terms | UPDATED: Fidelity shareholder row » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
