Pre-tax profits rise 40% to £56m for 2000
Churchill more than doubled its business volumes last year, but the growth won't last, managing director John O'Roarke told Insurance Times.
The insurer reported pre-tax profits up by 40% to £56m last year from £40m in 2000.
Gross written premiums more than doubled to £1.86bn compared to £875m in 2000.
There were contributions of about £330m from Prudential and £100m from Pearl, both partnerships made last year.
O'Roarke forecast the Pru would bring in about £400m or more this year and plans to grow it by up to 15% a year.
But he said the group's growth would slow.
He said: "You can't double your business volume every year.We would be looking at more like 20% year on year.
"We will be writing more business under the Churchill brand in the broker channel and we're encouraging NIG to keep growing."
He aims to win about a third of Churchill's business through brokers, partnerships and direct channels.
And Churchill's commission rates for brokers would stay stable, he said.
The group's combined ratio was 100.8% compared to 102.8% in 2000.
Combined ratio shows claims and costs as a percentage of premium income.
Churchill's combined ratio has traditionally been higher for motor than for household. O'Roarke said it was now becoming more profitable, as household was becoming more competitive.
He said: "Motor rate increases have probably kept up with claims inflation and because we've got bigger, the expense ratio has fallen."
The direct motor portfolio grew by about 10% last year.
O'Roarke predicted motor rates would rise about 5% or 6% this year, with household rising faster.
Churchill has seen its reinsurance costs for household rise from about 2% of premium to 6% or 7%.
