Motor specialist says underlying performance is strong
ERS blamed the cut in the Ogden rate for a second year of underwriting losses, with the combined operating ratio pushed over the 100% mark.
ERS reported a loss of £12.2m for 2017. That narrowed from a loss of £21.7m in 2016, due to a “strong underlying business performance” in what the motor insurance specialist described as “a year of significant disruption for the UK motor market.
Underlying trading remained strong with double-digit growth in core products, the company said.
The combined operating ratio fell to 104.9% from 108.4%. However, without the impact of Ogden and other one-off items, ERS’s COR would have been 97.9%.
ERS’ gross written premium fell to £376.1m from £406.1m in 2016. The company said the decline was expected, as it had taken a lead in raising prices following the Ogden cut, and exited underperforming classes where required rates were not being sustained in the market.
“The consistent market strategy is bringing benefits to the franchise with the highest ever number of presentations being received from brokers and a new record high (41%) of brokers now considering ERS first for specialist motor risks,” the company said.
“It is frustrating that for the second year running the significant progress the company has made in executing its strategy has been masked in the financial result by the impact of Ogden and other one-offs,” said chief executive Ian Parker.
“The underlying performance though remains strong. I am excited for the future and that the earnings profile will return to the trend established before the distortions caused by the change in the Ogden discount rate.”