Insurer explains big profit jump

Jason Smart

Gibraltar-based insurer Elite made a profit before tax of £11.4m in the year to 31 March 2016, up 147% on the £4.6m it made the previous financial year.

The improvement was driven by an increase in both underwriting profit and revenue.

Elite full-year key figures

£mYear to 31 March 2016Year to 31 March 2015
Gross writtem premium 166.87 160.4
Underwriting profit 17.41 14.41
Technical profit 8.67 6.72
Profit before tax 11.43 4.62
Cash and equivalents 80.57 73.75
Net assets 47.87 37.63

Underwriting profit was up 21% to £17.4m (2014/15: £14.4m) and the company’s combined operating ratio for the year was 87.5%. Gross written premium increased 4% to £166.9m (2014/15: £160.4m).

Elite said it was able to improve underwriting profit by taking on and concentrating on profitable schemes and placing underperforming business into run-off.

The company added that it has been able to write new business in Spain and Italy and that its property, financial products and after-the-event legal expenses books in the UK “had performed well”.

Elite chief executive Jason Smart (pictured) said that the result had been achieved in a difficult year, which included the introduction of Solvency II on 1 January 2016 and increased regulatory oversight and “inevitable pressures on our team” as a result of the insurer’s growth.

But he added: “Nonetheless, we have achieved a substantial increase in profitability as well as a comfortable increase in our surplus over solvency requirements under both Solvency I and Solvency II. I applaud our team for the fantastic efforts.”

The company said that notable achievements in the year included the renewal of a large property scheme and a number of other valuable schemes and receiving approval from the Solicitors Regulation Authority to set up in-house law firm Elite Law.