Catastrophes push Ecclesiastical into the red

Ecclesiastical, a specialist insurer of charities and churches, has made a pre-tax loss of £9.9m for the first half of 2010, compared with a £25.7m profit in the same period last year.

The firm’s underwriting loss for the half was £15.5m, compared with last year’s£15.1m profit, which the company said was due to the highest claims ration in the last 10 years.

The group combined operating ratio was 111.3% for the first half of 2010, compared with 87.9m in the same period of 2009.

The company’s capital base also suffered, with shareholders’ funds falling to £374.9m from £392.9m.

However, Ecclesiastical’s gross written premiums increased 8.8% to £250.3m.

“2009 was a year of good fortune for us with a particularly benign claims experience and a stock market recovery, which lead to our second best ever financial result,” said Ecclesiastical chief executive Michael Tripp in a statement.

“This year a number of exceptional weather events have hit us hard. In particular exposure to the Chilean earthquake, the worst winter weather in the UK for 30 years and two exceptional hailstorms in Australia have all had an impact on our business. In addition one-off costs associated with the reorganisation of our life business and the UK stock market at a low point on 30 June, resulted in capital value reductions of almost £9m.”

Despite the losses, the company will be giving an additional £10m grant to its charitable owner from the 2009 results. Tripp said the firm was currently on track to give its charitable owner its biggest ever sustainable grant from the full-year 2010 results.

“2010 continues to present challenges for us, but with a strong underwriting discipline, careful management and analysis of claims and an increasing appetite for new business we’re confident we can achieve our goals,” Tripp said. “In line with the rest of the UK market, for the rest of 2010 we will be taking action on our UK motor account and revising our casualty rates as third party claims escalate.”