Esure motor policies motor as its home arm is battered by Emma and the Beast
Esure today delivered a frosty blast to shareholders as the insurer took a multi-million pound hit from Britain’s prolonged winter.
Home insurance gross written premiums fell six per cent to £19.8m. In-force home policies fell 13.4 per cent in the first three months of 2018, the Sheila’s Wheels owner said.
“During the first quarter, the UK suffered a prolonged freeze event and significant disruption from ‘The Beast from the East’ and ‘Storm Emma’ and this resulted in £8m of claims costs in Home, which is £6m ahead of expectations,” said Esure interim chief exec Darren Ogden.
“I would like to thank colleagues for their dedication in helping our customers during this period in what were testing times.”
A problematic winter took the shine off a 21.1 per cent growth in motor policies. The firm booked £221.2m of motor gross written premiums during the quarter.
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Big hole
Esure shares rose around two per cent today with investors choosing to focus on Esure’s motor, rather than home, performance.
Hargreaves Lansdown equity analyst Nicholas Hyett said the Reigate-based firm’s figures “reflect what seems to be a couple of growing trends in general insurance”.
“The ‘Beast from the East’ has blown a great a big hole in weather contingencies, leaving insurers with their fingers crossed for milder conditions throughout the rest of 2018. Further flooding, storms or a cold winter all have the potential to seriously dent profits.
At the same time the healthy motor insurance market is being offset by increased competition in Home. What makes this trend interesting is that home insurance pricing actually seems to be increasing across the major insurers, despite the fall in policy numbers. If the big players are standing firm on pricing, then competition at the lower end of the market must be fierce indeed – price comparison sites strike again.
He continued: “Then again underwriting has never been a major contributor to group profits. With additional service revenues continuing to grow steadily, a punch up at the bottom end of the market is unlikely to both Esure too much.”
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