Gibraltar-based motor insurer Advantage made a profit after tax of £2.6m for the year ended 30 June 2010, 59% down on the previous year’s profit of £6.2m.
The company’s 2010 technical profit was largely in line with 2009’s coming in at £2.47m compared with £2.51m, as a higher claims bill eroded the benefits of the company’s increased gross written premium.
However, the company suffered a sharp drop in investment revenue to just £348,000 in 2010 from £4.3m in 2009. In addition, fair value gains on financial assets came in at £945,000 in 2010 – down 71% on 2009’s £3.2m.
Gross written premiums increased 43% to £192m from £134.3m, which the company attributed to rising rates and the growth in internet aggregator business. The company said renewal premium has increased 15%, but despite this its renewal retention rate was 60%.
Offsetting the strong growth in premiums was a 60% increase in net claims incurred to £130m from £81.4m. The £130m comprised £113.4m of claims paid, plus a $16.6m net increase to claims provisions.