Weather-related home claims costs are four times budget in first quarter
The Beast from the East cost Esure Group £8m in home claims costs in the first quarter – four times what the insurer had budgeted for the period.
Gross written premium rose 18% from a year earlier to £221m, with motor up 21% to £201m though home GWP was down 6% to £20m.
In force policies rose 9% to 2.4 million, with motor up 17% to 2.0m though home policy numbers fell 13% to 470,000.
Interim chief executive Darren Ogden said that after adjusting for the “exceptional” weather costs in the first quarter, Esure “remains on track to achieve a combined operating ratio similar to 2017 and well placed to deliver profitable growth in 2018”.
|Esure||2018 Q1||2017 Q1||Change|
|GWP motor £m||201.4||166.3||21.10%|
|GWP home £m||19.8||21.1||-6.20%|
|GWP total £m||221.2||187.4||18.00%|
|In-force policies motor millions||1.956||1.679||16.50%|
|In-force policies home millions||0.47||0.543||-13.40%|
|In-force policies total millions||2.426||2.222||9.20%|
Ogden said that, since the first reading of the Civil Liability Bill last month, competition in the motor market has increased. The bill includes provision for changing the way the personal injury discount rate is set.
While Esure is still targeting 3 million policies in force by 2020, Ogden said the company “will remain disciplined in its ratings actions”.
Esure’s estimate of weather claims costs comes a day after Direct Line also said it’s first quarter claims costs had been inflated by the poor weather.