Esure H1 profit up 46% despite £8m June weather loss

Esure Group Holdings made an operating profit of £60.2m in the first half of 2012, up 46% on the £41.3m it made in last year’s first half.

The company attributed the profit growth to improvements in its combined ratio and loss ratio. The combined ratio improved four percentage points to 92.7% (H1 2011: 96.7%) and the loss ratio was 1.3 points better at 70.4% (H1 2011: 71.7%).

The improvements came despite June 2012 weather claims adding £8m to claims costs and 3.4 points to the combined ratio.

Esure defines operating profit as earnings before interest, tax, amortisation  and exceptional non-operating costs.

The company incurred £2m of exceptional non-operating costs during the first half of 2012.

Esure chairman Peter Wood said in a statement: “We are extremely pleased with a half year that builds on a confident set of results for 2011. Despite the weather events at the end of June, we have seen a very strong underwriting performance enhanced by growth in the revenue from the pro-consumer additional services we develop and offer to our customers.

“We continue to adopt a prudent approach to reserving and to lay strong foundations on which we plan to build.”

He added: “Once again, thanks to strong management - led by CEO Stuart Vann - we are looking forward with confidence.”

Esure’s gross written premiums in the first half of 2012 increased 2.9%, to £249m (H1 2011: £242m). Total in-force policies increased 3%, to 1.7 million, compared with 1.65 million at the end of 2011.

The growth in in-force policies was driven by home insurance, where in-force policies grew 8%, to 480,000 (FY 2011: 443,000). Motor in-force policies remained almost flat, at 1.22 million (FY 2011: 1.21m).

Additional services revenue per in-force policy across motor and home policies increased by 7.7% in the half year to £58.90 (FY 2011: £54.70).