Financial highlights:
– General business gross written premium of £240.7m (£235.2m in H1 2011)
- UK GWP at £177.0m (£170.3m in H1 2011)
– Turnover of £259.3m (£251.8m in H1 2011)
– Pre-tax profit of £8.0m (£16.8m profit in H1 2011)
– Investment returns of £22.3m (£24.3m in H1 2011)
– Underwriting loss of £14.4m (£6.0m loss in H1 2011)
– Group combined operating ratio is 109.9% (104.0% in H1 2011)
- UK COR at 100.2% (94.4% in H1 2011)
– Shareholders’ funds decreased to £430.5m (£436.1m for full year 2011)
Commenting on the results Group Chief Executive Michael Tripp said: “These are steady results in turbulent times. Considering we’re operating in an environment that’s more volatile than ever, a pre-tax profit of £8m at half year puts us in a strong position for the rest of the year.
“We’ve seen modest growth for our Group in the first six months, with the UK business in particular delivering results in key business areas in line with expectations and achieving a near break-even COR. The Group turnover and GWP remain stable and broadly in line with 2011 figures.
“Our core business, particularly the Charity and Education books, are performing well and have contributed significantly to the half year results. We’re also making strides in our targeted UK growth areas, such as the Property Investors market, where, only 14 months after launch, we’ve already secured significant business and recently received industry recognition for our product at this year’s British Insurance Awards.
“Our investment returns have also continued to weather the storms of the Eurozone crisis and have helped offset the poor underwriting result. Although marginally down compared to the same period last year, our investment returns remain strong and continue to deliver good returns for both the Group and our investors.
“However, it is clear that our UK underwriting result needs improvement and the Group COR of 109.9% is higher than we’d like it to be. Our general business underwriting loss is a result of unprecedented UK weather conditions in the second quarter, the continuing challenges in Australia and our Group suffering the same difficult performance in household business that is currently affecting everyone in the market. Liability issues also continue to cause concern for us, particularly on the care account.
“We’ve already taken action through rate increases to improve profitability in the second half of the year, but understand we need to be even faster in implementing the increases and must do even more to see better performance at the end of the year and into 2013.
“Returning underwriting profitability isn’t our only focus for the rest of the year, however. The steps we’ve taken this year to improve our customer service, enhance our proposition to brokers and improve our underwriting result are already starting to pay off and I see them serving us and all our customers well in the long term.”
