14 August 2015 Insurance

ERS blames poor investment returns for H1 loss

Motor insurer ERS has blamed lower than expected investment income and one-off transformation costs for losses made in the first half of 2015.

But said it remains on track to make a small profit for the full year as it benefits from a transformation programme kick-started ion 2013 and due to end this year.

The company made a £2.8 million loss in the first half of the year, compared with a £1.2 million profit in the same period in 2014.

Its investment return was just 0.4 percent compared with 1.1 percent for the same period 2014, which it said was caused by volatile investment markets. Its gross written premiums (GWP) remained unchanged compared with 2014 H1, it said.

ERS said it is on course to achieve a full year profit for the second consecutive year, however. It said its transformation programme is on track and is due to be completed by the end of 2015.

Chief financial officer Katie Wade said: “This performance is set against the backdrop of continued tough market conditions, and continued distractions expected from such an ambitious transformation.

“The transformation is currently on track with the IT delivery completed during the half year. The final office moves and embedding during the second half of 2015 will complete the programme.”

Chief executive officer, Ian Parker, said: “ERS is coming to the end of our transformation programme, which has involved making some changes that were absolutely vital for us as a “motor only broker only insurer”, and came at a cost. This is reflected in our results.

“We have achieved what we have though because of the strength of our relationships with brokers and have retained our GWP at last year’s level.  The emergence of strengthening rates is long overdue.

“I know the Board shares my confidence that we have now built the foundations from where we can really start to grow and deliver decent returns to all capital providers.”

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