BUOYANT equity markets and acquisitions in the retirement living sector have pushed Australian Unity to a near-record annual profit of $32.1 million.
The result was 34 per cent up on the 2006 performance despite a flat return from the core health insurance business.
AU managing director Rohan Mead described the 12 months to June as a solid period of progress for all of the group's businesses.
He defended the performance of the healthcare division which delivered a flat pre-tax return of $50 million.
"I'm positive about the overall underwriting result for our health insurance business which compares very favourably with many of our competitors," he said.
"We also invested heavily in new systems and kept our premium increases well below inflation."
Bottom-line growth was fuelled by the retirement living business which boosted its profit contribution by 223 per cent to $9 million.
AU has established a significant presence in the retirement property market after acquiring two new properties in New South Wales in the last year.
The general insurance businesses -- most of which were sold to Calliden Group in July -- also more than tripled its contribution to group profit. The division grew its pre-tax earnings by more than $9 million to $14 million.
AU has retained a half stake in Farmers Mutual Insurance and Mr Mead said the group would review its interest in that business "over time".
Mr Mead indicated that the AU board was carefully monitoring developments in the health insurance market, particularly the anticipated floats of Medibank Private and MBF.
In the past three years AU has been considering the pros and cons of seeking a stockmarket listing, but baulked at the prospect in November 2005 when a majority of its members voted against such a move.
Mr Mead said that moves by the big private health funds to float on the ASX did not necessarily mean that AU should follow suit.
"With our current mutual ownership model we have been able to grow the corporation significantly and successfully," he said. "A change of capital ownership structure doesn't necessarily change that."
Pressure on small health funds to demutualise has dissipated in recent times as the industry has expanded shared service ventures for transaction processing and purchasing.
These co-operative ventures have effectively kept the cost ratios of the small funds in line with or ahead of the dominant industry players.
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