PI broker combats tough conditions with new business and cost-cutting
Professional indemnity (PI) broker Prime Professions has boosted its profit by 53% despite revenues being hit by falling PI rates.
Prime’s profit before tax for the year to 31 March 2012 was £469,319, compared with £307,174 the previous financial year.
The broker said in a Companies House filing that amid “extremely competitive” conditions, reduction in PI rates across most professions had hit revenues in the 2011/2012 financial year.
But it added that this had been offset by new business growth. As a result, revenues were flat at £8.9m.
During the year, Prime expanded into directors’ and officers’ liability insurance, increased its market share of the Irish solicitor market and opened a new office in Leeds.
In addition, the broker cut its administrative expenses by by 2.5%, or £222,170.
Prime’s improved profit came despite an interest bill of £41,208 as a result of a new £3m revolving credit facility from HSBC. Prime paid no interest the previous financial year.
The new credit facility replaced an existing arrangement with immediate parent Prime Professions Holdings.
Prime also has a further £2m available from its ultimate parent, Primary Group, if it needs additional financing to further its growth objectives.
Prime Professions 2011/2012 results in £m (compared with 2010/2011)
- Turnover: 8.9 (8.9)
- Operating expenses: 8.5 (8.8)
- Operating profit: 0.4 (0.1)
- Profit before tax: 0.5 (0.3)
- Net assets: 3.1 (2.6)
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