Miller Fisher, parent company of loss adjuster Miller Pycraft, has admitted it had a "difficult and disappointing" first half year, thanks to a surprise shortfall in the loss adjusting market.
The company tumbled into the red with pre-tax losses of £1.5m for the six months to June, compared with a profit of £2.4m at the same stage last year.
Chairman Sir Timothy Kitson, said the progress made in a number of parts of the group had been overshadowed by the downturn in the UK loss adjusting market.
He warned: "We do not expect that market to improve until the latter part of the year."
Kitson said Miller Fisher had taken "firm action" to cut costs and improve productivity in the loss adjusting division, which is expected to return to profit before the end of the year.
Loss adjusting fell "materially short" of the levels expected by the board. Kitson said this was brought about by a decline in claims activity in the household market across the UK as a whole and that it had been a common experience for most of the other loss adjusting firms in the market.
The mild winter saw a cutback in weather-related claims while insurance mergers have caused a short-term reduction in the number of claims outsourced to loss adjusters.
Profits were also hit by exceptional costs of £650,000 to pay for redundancies and office closures.
However, elsewhere the group made good progress, with Miller International showing further profit growth and, in Ireland, Miller Farrell consolidating its position following the acquisition of travel claims handler Francis Charlsey.