Zurich-owned broker’s turnover dipped 1.7% because of ‘difficult trading environment’
Endsleigh Insurance Services made a profit after tax of £6.6m in 2013, down 29.7% on the £9.3m it made in 2013.
Earnings before interest, tax, depreciation and amortisation (EBITDA) also suffered, falling 18.4% to £12.3m (2012: £15m).
Part of the cause was a 1.8% reduction in turnover to £49.7m (2012: £50.6m), which the Zurich-owned broker blamed on tough market conditions.
Endsleigh said in a Companies House filing: “The economic and trading environment remains difficult, particularly in the motor market, with increasing pressure on commission income and also the impact of increasing regulatory pressures.”
The broker’s profit was also hit by rising costs. Administrative expenses increased by 3.7% to £43.3m (2012: £41.7m). Endsleigh said the increased expenditure was driven by inflation and an increase in insurance and FCA fees.
The profit drop meant that Endsleigh’s return on capital employed fell to 21.6% in 2013 from 31.8% in 2012.
The company said: “Performance has been under pressure as margins are eroded by competition.
“In certain products, price comparison websites have focused customers primarily onto price as a key decision point. This is particularly true for motor insurance.
“Our response to this is to continue to add value through customer segmentation in order to improve margins whilst simultaneously driving better returns for our insurer partners and delivering better pricing for our customers.”
Endsleigh added that it was expecting additional sources of revenue this year.
It said: “Endlseigh Insurance Services is extending its reach as an outsourced provider by taking on additional claims handling services in 2014.”
The company said it was generating additional revenue by introducing fees for services such as the provision of IT services, electronic data interchange transactions and motor claims handling services to the insurers it deals with.
Zurich is working to bring Endsleigh and its UK personal lines businesses closer together. In April this year Zurich appointed its UK personal lines managing director Tim Holliday to head up Endsleigh, replacing previous managing director Ian Passmore.