But group reports 102.9% COR despite improvements
Ecclesiastical’s UK general insurance business has returned to underwriting profitability in 2013.
The UK division made an underwriting profit of £9.8m in the year, compared with a £12.3m underwriting loss in 2012.
The specialist insurer’s UK GI combined operating ratio (COR) improved by 10.2 percentage points to a profitable 95.3% in 2013 from an unprofitable 105.5% in 2012.
Ecclesiastical group chief executive Mark Hews said: “The improvement in the UK underwriting profit to £9.8m, with a COR of 95.3%, demonstrates how our decisive action and stronger focus on core sectors has led to improved underwriting performance.
“It is the result of action taken in a number of areas: reviewing our risk appetite across our target markets to ensure that we only compete where we have knowledge and expertise, reviewing key portfolios, exiting unprofitable lines of business, and reorganising our teams into stronger regional hubs to make it even easier for brokers and customers to do business with us.
“Some of the decisions we have had to make have not been easy, but have been necessary to enhance the grants we make to charity and other good causes.”
Ecclesiastical’s results at group level also improved.The company’s pre-tax profit increased by 77% to £66.9m (2012: £37.8m).
This was mainly thanks to a 30% increase in investment income to £73.8m (2012: £56.6m).
The underwriting result also improved, but was still in loss-making territory. The underwriting loss for 2013 was £8.2m, an improvement over 2012’s loss of £24.6m.
The group COR improved by 5.6 percentage points to 102.9% (2012: 108.5%).
Hews said Ecclesiastical’s international general insurance business had “mixed results” for the year.
He said: “Our Irish operations were affected by liability challenges similar to those experienced in the UK.
“We have tackled these head-on and are already seeing improved performance. In Australia, our underlying performance improved substantially, but the net result was impacted by high reinsurance costs.
“Again we have taken steps to address this issue and have put in place a new reinsurance arrangement taking effect from 2014. Our Canadian business returned a credible result despite being impacted by the severe flood events in Toronto and Calgary.”
Commenting on the results overall, Hews said: “This is a very positive set of results for our group following a year in which we have re-focused and restructured a number of our businesses.”
He added: “We achieved a significant amount during 2013, often in challenging circumstances, through the hard work and commitment of everyone at Ecclesiastical. Although there is much to do in the next few years, we remain optimistic and confident that we will be successful in achieving our ambitious and central goal of giving £50m to charity over the next three years.”