Esure vows to improve results in 2019 after Sir Peter Wood admits a ‘disappointing’ year
Esure founder Sir Peter Wood admitted the latest results were ‘disappointing’ amid deep underwriting losses. The Surrey-based insurer racked up a combined ratio of 111.8% in 2018 (2017: 96.7%). Meanwhile, a £98.6m profit in 2017 turned into a £15.6m loss for 2018.
At the root of esure’s problems were increasing claims costs in home and motor.
Esure’s solvency woes investiged by Insurance Times
|ESURE KEY STATS 2018||Motor||Home|
Big problems in motor
Motor was the biggest problem, with an underwriting loss of £74.5m (2017: £24.9m profit).
Esure blamed accidental damage inflation, deteriorating performance on prior years accounts and big weather hits in the first half of last year.
This resulted in a major worsening of the loss ratio to 88.5% (2017: 73.2%), with 4.4% taken because of strengthening reserves, especially in small and medium sized bodily injury claims.
GWP increased 5.1% to £771.4m (2017: £734.3m) and in‐force policies grew 2.2% to 1.937 million (2017: 1.895 million).
The loss ratio in home fell to 82.1% (2017: 65.6%), although the prior year run off was much better than motor with a 3.3% release of reserves.
The underwriting loss was £17.5m (2017: £2.3m). Esure blamed large weather and subsidence in the first half of last year.
GWP increased 5.7% to £90.8m (2017: £85.9m) aided by in‐force policy growth of 6.9% to 511,000 (2017: 478,000).
Solvency coverage needs bolstering
The losses meant esure was only just above its solvency capital requirement with own funds of £356.7m (£330.3m) and solvency coverage at 108% (2017: 156%).
Chairman Peter Wood said: ”The team is focused on evolving the Group’s long-term strategy in response to a world which is changing at an increasing pace, with advances in digital and data analytics shaping customer expectations of all businesses.
“However, 2018 was not without challenge.”