Around 80% of the insurer’s profitability is being reinvested back into developing the business

After reporting a £21.3m dip in profit for the 12 months to 31 December 2021, when compared to 2020, personal lines insurer Esure plans to invest in “the transformation of the company” to align with its long-term goals to “leap a generation” in terms of digital capability and fix insurance for good, according to Esure chief executive David McMillan.

In its year-end financial results, published on 2 March 2022, Esure recorded a “minimal” profit after tax of £7.7m for 2021, compared to a £29m profit after tax in 2020.

Profit before tax followed a similar trajectory, falling from £34.2m in 2020 to £5.2m last year, while Esure’s combined operating ratio (COR) also worsened to 101.1% - compared to 98.8% in 2020.

Trading profit, however, rose to £83.5m in 2021 – up from £82.6m in 2020.

Speaking exclusively to Insurance Times, McMillan explained that around 80% of Esure’s profits are being invested in its ‘Game Changer’ strategy, which aims to bring together technology and a customer-centric approach. Esure launched Game Changer internally in 2020 before more widely promoting the strategy in March 2021.

This aligns with the insurer’s ambition to be a “powerful force for good” for its customers, colleagues and communities.

McMillan said: “We’ve come out of [the financial year] feeling quite strong. We’ve got a clear plan in terms of what we want to do and we’ve got a lot of opportunities for growth and improving the business.”


Esure’s in force policies increased by 3.7% to 2.54 million last year, compared to 2.45 million in 2020. This marks the first time that the company has exceeded the 2.5 million customer threshold.

Gross earned premiums remained stable at £830.2m (2020: £829.3m).

Turnover, however, decreased last year to £908m, down from £936m in 2020. McMillan attributed this to the stock pricing market and the fact that the insurer has reduced its risk mix to write a higher proportion of lower premium business.

Net revenue fell from £645.4m in 2020 to £577.6m in 2021 after Esure increased its quota share from 30% to 40%, in line with the group’s capital strategy.

Meanwhile, profit margins, working “hand in hand” with the quota, improved two percentage points to 15% between 2020 and 2021.

Home and motor

McMillan explained that Esure’s underwriting loss increase was “largely driven” by a soft market and increased claims frequency from motorists returning to the road post-pandemic.

Trading profit in Esure’s motor book decreased from £126.9m in 2020 to o £106.9m last year. In force motor policies, meanwhile, grew 3.1% over the course of 2021 to reach 1.93 million (2020: 1.87 million).

The insurer’s home book saw a big jump in trading profit, however. This rose from £0.2m in 2020 to £18.8m in 2021. McMillan associated this with undertaking the “largest overhaul” of Esure’s pricing algorithms in the early part of the year.

He said: “To a certain extent, we felt that our home pricing sophistication had lacked the developments we’ve had over the last few years in motor, so we had a big release on that and it’s just helped us to be a bit more fine-tuned in terms of the way we price business.

“We haven’t really captured the opportunity of cross-selling, which is partly because we haven’t had the technology to do that well for customers, so I see that as something that will help us grow in the years ahead.”

The strategy

The four strategic pillars of Esure’s Game Changer strategy are:

  • Digital leadership: Building a technology ecosystem to transform how the business engages with customers.
  • Enhancing value: Seeking to treat every customer as an individual by developing personalised products and prices - McMillan believes a lot of Esure’s larger competitors are “still grappling” with this.
  • Exceptional culture: Diverse expertise with cross-industry talent, focused investment on customer behaviour, as well as deriving maximum value from technology and data.
  • A greener and safer world: Reducing the insurer’s carbon footprint and actively supporting communities in which the business operates. Esure has also introduced a green parts initiative, which seeks to support its repairers to achieve carbon savings as well as develop a carbon neutral bodyshop network. The initiative started on a pilot basis with Synetiq in 2019, but the companies signed an official contract last month (February 2022).

At the heart of its digital leadership pillar is Esure’s new platform, which launched earlier this year with less than 100 operating customers. Forming the backbone of the platform is cloud-based Amazon Web Services (AWS), omnichannel contact centre Amazon Connect and US digital insurance platform EIS.

McMillan said: “[Esure’s platform users] will ramp up during this year as we take the proposition out through the price comparison websites and across the customer base.

“As we get our existing customers onto the new platform, which has much higher levels of digitalisation and a much stronger customer journey, we believe that will be an engine for growth and greater efficiency.

“The architecture of it really supports cutting edge data science, so we’re planning to have artificial intelligence right across the whole enterprise by the time we’ve finished.

“I would expect, if the market allows us, we will grow profitability more strongly in the years ahead.”

During 2021, the group - which includes Esure and Sheilas’ Wheels - redeveloped its key measurement metrics as part of the Game Changer strategy, to ensure its performance indicators better reflect how the business is now managed.