The insurer recorded an underwriting loss and loss after tax last year

Covea Insurance has announced a recently developed strategic plan to help it get back to profitability after recording losses last year.

According to the insurer’s financial report for the year to 31 December 2023, the firm recorded a loss of £87.3m after tax during the 12 months.

While this was an improvement from the £145.5m loss recorded in 2022, figures showed that Covea’s underwriting performance worsened.

It recorded an underwriting loss of £142.4m in 2023 compared to £134.2m the previous year.

Gross written premiums (GWP) also decreased by 17% year-on-year, dropping from £855m in 2022, to £711.3m in 2023.

Covea highlighted that due to inflation and “the level of uncertainty in the UK market”, the firm had strengthened its reserving position relating to 2022 and prior years, with it having a negative impact on its 2023 results.

However, the insurer said it had been working on a three-year strategic plan called Doing what Really Matters.

“The company reported a loss of £87.3m after tax for 2023,” Covea said.

“However, the 2023 results – excluding prior year developments and normalised for weather – are aligned to the latest plan and the company has recently developed its three-year strategic plan ‘Doing what Really Matters’, starting with a return to profit from 2024.”

Home and motor

The overall performance of the business was driven by underwriting losses being recorded in its personal lines home and motor arms.

Within motor, GWP reduced by 14% year-on-year, while it suffered an underwriting loss of £78.7m.

And the home business recorded an underwriting loss of £22.5m despite GWP increasing from £156.4m to £173.7m year-on-year.

Explaining the results, Covea said: “The motor underwriting result was adversely impacted in 2023 by reserve strengthening relating to prior years claims.

“On a normalised basis, the underlying performance of the motor book improved significantly year-on-year, whilst the high inflation environment continues to affect the entire UK motor insurance market.

“The home book of business experienced an 11% growth in GWP over 2023, mainly driven by an increase in average premium.

“The 2023 result includes £13.3m of reserve strengthening on claims relating to 2022 and prior years, as well as £19.1m of weather-related claims – out of which Babet and Ciaran account for 43% of the total.”