ERS profits damaged by poor investment income
ERS, the specialist motor insurer and Lloyd’s managing general agent (MGA) has reported a dip in its 2015 profits – down to £6 million, compared with £8.3 million in 2014.The company has put this decline down to tough market conditions and poor investment income.
ERS did see two percent growth in its gross written premiums last year however, to £394 million. The firm said that this growth represents its underwriting discipline and early momentum as it comes out of transformation and continues to focus on its strategy as a “motor only, broker only insurer”.
ERS’ combined ratio also improved to 99.8 percent in 2015, compared with 101 percent in 2014. This is the first time that the firm’s combined ratio is below 100 percent since 2009, with improvements across all ratios but the majority of improvement coming from the loss ratio.
In April 2013 the provider was bought from IAG and announced it soon after that it would become a broker-only firm.
Ian Parker, chief executive officer, ERS, said: “The second stage of the turnaround is now complete, with our IT transformation executed and completed within 2.5 years, and the final stage of our operational simplification delivering a skilled and efficient workforce in London and Swansea.
“This transformation has been completed against a backdrop of prolonged tough market conditions and a volatile investment market. The continued support of our brokers has been invaluable throughout our transformation, as has the discretionary effort of our employees. 2016 brings the whole focus of the company on the insurance business for the first time, rather than the transformation agenda and I am looking forward to that.”
Katie Wade, chief financial officer, ERS, also said she was delighted with the progress made by the business during 2015 particularly in a year of substantial volatility and headwinds in terms of transformation and investment yields.
“These results have been hard fought but the impact of transformation is now starting to bear fruit, and we anticipate seeing even more evidence of this during 2016. Our investment income was disappointing at £2 million, compared to £12 million in 2014. 2016 is an exciting year for ERS.”
