Insurer returns to underwriting profitability as COR improves by 20 points

Esure made an operating profit of £80.8m in 2011, more than four times the £18.6m it made in 2010.

The personal lines  insurer’s combined ratio improved 19.9 points to 94.6% (2010: 114.5%). The company trimmed its loss ratio by almost 25 points to 66.8% (2010: 91.5%).

The better result comes amid a general improvement in UK insurers’ personal lines business, mainly driven by price increases in motor and a low level of winter weather claims compared with the previous two years. Many motor insurers have hiked rates to stave off rising claims costs from bodily injury and fraud.

“These results reflect continuing improvements in many areas of our business,” esure founder and executive chairman Peter Wood said in a statement. “In 2011, we saw the first rewards of concerted action to optimise our underwriting performance, stamp down harder on fraud and grow our income from the additional services we offer our customers.

He added: “The results of these actions contribute to a significant increase in 2011 profits by boosting key contributors, laying foundations on which we plan to build.”

In addition to improving profitability, esure boosted revenues in 2011. Gross written premiums increased 9.5% to £513m (2010: £468m), and the number in-force policies rose 6% to 1.65 million (2010: 1.56 million).

During the year, Esure has appointed Stuart Vann as chief executive, following Wood’s decision to become executive chairman, and Dame Helen Alexander as deputy chairman.

Several of Esure’s peers have posted big underwriting profitability improvements in 2011. Direct Line Group (formerly RBSI) posted a 21% combined ratio improvement to 100%, Ageas UK improved is ratio 9.6 points to 99.9% and LV=’s general insurance business’s combined ratio fell 6.5 points to 97.7%.


Esure Group Holding 2011 results (compared with 2010)

• Group operating profit: £80.8m (£18.6m)
• Gross written premium: £513m (£468m)
• Combined operating ratio: 94.6% (114.5%)
• Net loss ratio: 66.8% (91.5%)
• Total in-force policies: 1.65 million (1.56 million)
• Motor insurance policies in force: 1.21 million (1.18 million)
• Home insurance policies in force: 443,000 (380,000)