Friday 12th December 2003
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At press time the shares were heading toward $4, compared to their issue price of $1.90 a share for retail investors.
Recent gains follow a strong profit announcement from the company and an earnings upgrade for the current year after fewer claims in the four months to October.
Promina, spun off from Britain's Royal & Sun Alliance in May, is New Zealand's second-largest general insurer with about $440 million of gross written premiums.
The company says it is well on track to meet its prospectus forecast for the full year of $A188 million and analysts are forecasting a net profit this year of $A265 million. That assumed a return to a more normal claims environment in the late part of the year. Better-than-expected weather conditions kept claims down in the early part of the year but insurers generally record an increase in claims when the threat of major storms and bushfires in Australia increases in the late part of the year.
Premiums are also on a rising cycle and are expected to climb further as the industry addresses past poor underwriting returns and absorbs the risks of war and terrorism.
Investors are now focusing on the stock's long-term prospects as rival AMP battles uncertainty over its restructuring.
Promina, which has about 3500 New Zealand shareholders, reported a net profit for the six months to June of $A108.5 million.
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