January 29, 2003 by Canadian Underwriter
The 2002 yearend earnings prediction from broker consolidator Hub International (TSX, NYSE: HBG) has been raised slightly to US$1.04-$1.06 per share from the US$1.03-$1.05 per share estimated in December. The 2003 earnings estimate of US$1.08-$1.17 remains the same.
The announcement was made as part of a presentation by Hub chairman and CEO Martin P. Hughes to the New York Society of Security Analysts this week. Hughes also notes that the company’s growth strategy and cost-cutting measures are paying off.
“Year-end reviews with each of our major operating units indicate that we will continue to generate organic growth in a challenging environment,” Hughes says. “We believe we can maintain a solid internal growth rate in the coming year.”
Hub has turned its focus to middle-market corporate clients, a move which has been positive in light of an increasingly selective underwriting environment, Hughes says. He notes that higher premiums have driven higher commissions in the past year, but as the soft market approaches, growth will come from an increase in the use of insurance. “Higher rates – the cost per dollar of coverage – have forced many clients to raise their deductibles or change coverage levels, increasing their own risk levels. As the economy improves, it is likely these clients will take advantage of the opportunity to reduce their risk by increasing coverage or reducing deductibles.”