Charles Taylor ‘cautious’ on second half after strong H1

Charles Taylor chief executive David Marock is “cautious” about the loss adjuster’s performance in the second half of 2013 despite boosting profit and revenue in the first half.

Charles Taylor made a profit after tax of £3.4m in the first half of 2013, up 22% on the £2.8m it made in the same period last year.

Total revenues were up 6% to £56.1m (H1 2012: £53m).

Cautious optimism

Speaking to Insurance Times following the release of the results this morning, Marock said: “The performance in the first half of the year was very solid and we are very pleased.

“At the same time, we are still cautious about the second half of the year.”

Part of the reason for the caution is that Charles Taylor’s full-year 2012 results were given a one-off boost by a life run-off deal, which involved the transfer of life company Alico to Charles Taylor’s Isle of Man run-off operation.

Marock said: “We always said that we didn’t expect that to repeat this year, and it won’t to the same degree.”

Another reason is the fact that Charles Taylor has continued to invest in the business, which will increase costs. Marock said: “Because of the nature of investment, it always takes time to pay off.”

Also, growth and profitability at Charles Taylor’s core loss adjusting business, which accounts for more than 50% of its revenue, is dependent on there being large, complex losses to assess.

The division suffered last year because of a relatively low level of losses. Marock said: “There is always that uncertainty.”

Adjusting business boost

However, Marock said the adjusting business was the star of the show in the first half of 2013, because of a higher level of loss activity creating more work for the division.

Adjusting revenue was up 11.4% to £28.3m (H1 2012: £25.4m) and the division’s operating profit was up 38% to £3.6m (H1 2012: £2.6m).