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CBL expects growth in European unit

NZ NewswireNZ Newswire 3/05/2016 Fiona Rotherham

CBL Corp expects its European unit will be "an outperformer" this year as new programmes the insurer started last year in France and Scandinavia ramp up.

"Mexico, Scandinavia, Italy and France have been standouts for the group and we see strong growth in each of these markets in 2016 and out into the medium future," managing director Peter Harris told shareholders in Auckland at the company's first annual general meeting since listing on the NZX and ASX last year.

Its CBL Europe unit is expected to grow strongly this year and next, with business that doesn't conflict with CBL Insurance's long-established European channels, he said.

The Auckland-based insurer, which began as Contractors Bonding Ltd in 1973, sells credit surety and financial risk insurance in 25 countries and derives almost 98 per cent of its revenue offshore.

It paid out a 4.5 cent per share dividend last month after posting an 83 per cent rise in 2015 annual profit to $35.5 million, beating its IPO profit forecast of $26.1 million

"We're happy with the numbers for the first quarter of 2016," Harris said at the AGM.

He said CBL's aversion to natural catastrophe insurance has served it well in uncertain times and its key metric for 2015 was its low combined loss ratio of 79.7 per cent.

CBL used A$44 million of the $90 million in new capital raised in the IPO to buy Australian specialty insurer Assetinsure and Harris said it means CBL can leverage the company's Australian Prudential Regulatory Authority licence in Australia to increase the group's business in that market.

It also bought a 35 per cent stake in Mexican specialist bonding and surety insurance company Afiandzdora Fiducia which Harris said had allowed the company to grow and obtain several increased credit licences. CBL has operated in Mexico selling builders warranty insurance since 2002 in partnership with Seguros GMX.

The company's shares last traded on the NZX at $2.40, well up on the $1.55 listing price.

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