The insurer also paid out £18.7m for coronavirus-related claims ‘where there is confirmed cover’
Charity-owned insurer Ecclesiastical has recorded a £15.7m loss before tax for 2020, compared to a £73.3m profit before tax in 2019 – it attributed this fluctuation to the impact of the Covid-19 pandemic on financial markets.
These figures form part of Ecclesiastical’s full year financial results, published today.
Despite this noted loss, Mark Hews, group chief executive of Ecclesiastical, said the business was “financially resilient”.
He explained: “We remain financially resilient despite the headline loss before tax of £15.7m, which was principally due to investment losses experienced in the first half of 2020.
“Given our financial strength, we hold a sizeable equity portfolio and accept that this can lead to short-term volatility in our reported results. We have since seen steady gains and we continue to take a long-term view with our investment strategy.”
The insurer also confirmed that it shelled out £18.7m for Covid-19-related claims in the 12 months to 31 December 2020 “where there is confirmed cover”. This saw the firm’s underwriting profit fall from £20m in 2019 to £12.m in 2020.
This follows Ecclesiastical being one of the eight insurers to participate in the FCA’s test case action around business interruption (BI) claims at the High Court in July last year. It did not appeal the September decision to participate in the Supreme Court hearing.
On this, Hews said: “Some customers have been disappointed that their policy has not provided business interruption cover during the pandemic.
“We were always clear that our BI policies were never intended to cover pandemics and we welcomed the certainty and clarity provided by the outcome of the Financial Conduct Authority test case in our favour.
“I recognise this has been a challenging time for many of our customers. Many businesses, charities, schools, nurseries and churches have suffered financially due to the impact of successive lockdowns.
“We introduced a series of measures to support our customers and partners during this difficult period. These included paying claims quickly where cover was in place, offering enhanced cover, free of charge, to many of our customers and providing credit support to customers in financial difficulty.
“We also introduced online information hubs, as well as pandemic-related risk management advice.”
‘Exciting phase’ ahead
Ecclesiastical’s gross written premium (GWP) grew by 11% over the course of 2020 to £437m, compared to £394m in 2019. Hews added that this was “supported by strong retention as well as new business wins”.
Despite the pandemic-related hit to its financial figures last year, Hews noted that Ecclesiastical is “entering an exciting phase in our history” in 2021.
He explained: “2020 was a uniquely challenging year for all of us. While we entered the year in a position of strength, the Covid-19 pandemic had a significant impact on the global economy and our financial performance suffered like many businesses.
“Despite this, we remained true to our purpose of contributing to the greater good and have continued to give to church, charities and communities most in need.
“As we move into 2021, we are entering an exciting phase in our history. While many businesses retreat in the face of the coronavirus pandemic, we see the opportunity to refocus and re-energise our business based on our core strengths – our charitable purpose, our outstanding people and our passion to do the right thing.
“We recently unveiled a new visual identity for the Ecclesiastical Insurance brand. It represents everything that our audiences know and love about our organisation - our expertise, our ethics and our unique purpose - but articulated with greater energy than before. It reflects an Ecclesiastical that not only does good, but is unified, dynamic and innovative.
“Alongside the investment in our new visual identity, I’m delighted that our new head office in Gloucestershire is now fully operational and ready to welcome employees with new flexible ways of working once lockdown restrictions are lifted.
“We are also continuing to invest in new systems to improve our efficiency and improve the customer experience.”