Church claims hit Ecclesiastical.

Ecclesiastical is considering increasing premiums and rewriting the terms of its metal theft cover after being hit with expensive claims.

The specialist insurer has now drafted in private investigators to tackle the problem after losing £8.7m in the first half of the year through claims involving stolen metal from buildings, particularly churches.

Michael Tripp, group chief executive of Ecclesiastical, said the insurer will change its pricing structure to cope with the thefts, which cost the business £10.5m in 2007.

“We are currently paying around £1m a month in claims,” he said. “Our church customers are worst affected, and the volume of claims for these customers is so high, we are reviewing the limit of cover for theft of metal specifically and increasing premiums.

This is a last resort though, we remain focused on spreading security advice as widely as possible. Where thefts have occurred we are pushing for alternative materials to be used instead of lead and we're also insisting that SmartWater is applied to deter thieves and make the lead traceable.”

Tripp said the insurer had hired a number of private investigators to catch thieves in a number of metal theft "hotspots".

“We think we are doing all that we can,” he said. “We are working with private investigators and we are working with the churches. But we can’t solve the problem on our own.” In its half year results, Ecclesiastical posted a pre-tax loss of £21.5m for the first six months of 2008, compared to a £28.7m profit in the fist half of 2007. Gross written premiums increased 4.5% to £210.8m, while UK claims costs fell to £44.7m, from £49.8m in 2007.

Stock market turmoil resulted in an investment loss of £35.3m, compared to a profit of £48.1m in 2007. The group's overall combined ratio moved slightly to 104.5% from 101.2% in 2007.

Tripp added that South Essex Insurance Brokers, the broker it acquired in February, was “on track” after delivering a £0.4m profit in the first three months since acquisition. He said there were currently no more acquisitions in the pipeline.