Brightside braced for soft market as 2012 profits rise 25%

Broking group Brightside made a 2012 profit after tax of £11.7m, up 25% on the £9.4m it made in 2011.

Profit before tax was up 29% to £17.5m (2011: £13.6m) and earnings before interest, tax, depreciation amortisation and exceptional items (EBITDA) increased 22% to £22.5m (2011: £18.5m).

The profit growth was supported by a 13% rise in revenues to £91.2m (2011: £80.4m). Policy sales increased 5% to 465,726 (2011: 444,189).

The company plans to pay a final dividend of 0.28p a share, adding to the maiden dividend of 0.22p a share paid on 26 October 2012.

Brightside chief executive Martyn Holman said: “2012 was the 10th successive record year for Brightside with 35.6% growth in earnings per share.

“ In particular, the systems capability purchased late in 2011 and a strengthening of our panel of insurers has enabled us to grow our e-car on-line offering and initiate affiliate programs for major brands and we have seen continued growth in our ancillary businesses.”

Brightside added insurers Markerstudy and Ageas to its motor panel in 2012.

Holman warned that there are signs that insurance prices would soften in 2013, which brings mixed fortunes for brokers.

Softening rates reduces broker commissions, but also spurs more insurance buying and prompts insurers to seek more policy volume, he argued.

Holman said: “This represents a huge opportunity for brokers to expand their footprint.

“Brightside is well placed for the expected market softening in 2013. We offer reliable underwriting to our insurance partners through our strategy of policy validation and this is attractive for insurers with capacity.”