21 August 2014 Insurance

Ecclesiastical hits first underwriting profit in five years

Ecclesiastical has posted a strong set of results for the first half of 2014, the insurer making its first underwriting profit since 2009.

Its underwriting profit hit £2.9 million in the first half of 2014, compared with an £8.9 million loss in the first half of 2013.

The insurer’s combined ratio improved to 97.5 percent from 106 percent in the first half of 2013. Within the UK segment, the operating ratio improved minimally to 95 percent, compared with 95.6 percent in the same period of 2013.

The operating ratio in Australia improved to 106.6 percent, compared with 148.7 percent, in Canada to 95.5 percent, compared with 110.7 percent and in Ireland to 109.4 percent, compared with 205.9 percent.

Its gross written premiums fell to £164.4 million, compared with £205.7 million in the first half of 2013. The insurer faced claims costs of £9 million net from the storms and floods at the start of the year in the UK.

Mark Hews, group chief executive, said: “In our annual report and accounts we set out our refreshed strategy and outlined the actions we had taken to tackle unprofitable areas of our business and shape it for the future. I am pleased to report a profit in the first half of 2014 of £18.4 million before tax, which was ahead of expectations. I believe this demonstrates that the actions we have taken are having a positive effect and it reflects the effort put in by our teams to improve our business.

“We have continued to successfully drive forward the changes required to reshape our business to deliver the strategic goals we set out in our 2013 annual report. We are pleased with the progress made so far which is reflected in the more consistent financial performance across all of our business units in the first half of the year, particularly the return to an overall underwriting profit.

“We operate in a challenging commercial environment, one in which competition for general insurance business is intensifying. We will continue to seek out good quality business in our specialist markets and not pursue business where competition drives rates to uneconomic levels. We will not seek growth for growth's sake, but focus on acquiring profitable business which will support our aim to give £50 million to charitable causes over three years.”

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