Ecclesiastical suffers £7.7m loss for 2011

Ecclesiastical suffered a pre-tax loss of £7.7m during 2011 (2010: £50.4m profit) as UK liability claims mounted and natural catastrophes in Australasia took their toll on the Group.

The specialist insurer’s combined operating ratio deteriorated to 105.4% (2010: 102%).

As a group, the company, which insurers churches and charities, made an underwriting loss of £16.1m (2010: £5.9m), but its UK operation posted an underwriting profit of £7.6m.

It also achieved a turnover of £498.8m, just short of the record £506.6m turnover in 2010, while general insurance grow written premium was down slightly at £465m (2010: £474.4m).

The company’s net new funds for its investment management business increased to £142m (2010: £110m).

Group investment returns declined to £8.5m (2010: £60.1m) in the face of market volatility, low economic growth and the ongoing eurozone crisis.

Shareholders’ funds also decreased to £436.1m (2010: £456.9m).

The company meanwhile increased its total grant payable to its charitable owner Allchurches Trust to £10.25m – Ecclesiastical’s largest ever sustainable grant.

Ecclesiastical Group chief executive Michael Tripp said: “These are solid results in a turbulent financial environment and highly competitive insurance market. We’ve delivered good growth and profit in the UK while dealing with some of the worst natural disasters our overseas businesses have ever faced.

“Our UK business has performed particularly well in a relatively static general insurance rating environment securing a £7.6m underwriting profit. The success has been driven by excellent performance in business areas including our new property owners product in the London market and our growing education account.

“Our UK liability account deteriorated in line with much of the market, driven by the economic environment. We are taking underwriting and pricing action to correct this.

“Despite 2011’s challenges our business maintains a strong capital position. A hundred and twenty-five years ago we were founded with the idea of insuring church property and ploughing any profits back into the good works of the church. While our client base is much wider than in 1887, it is a commitment we are still proud to keep today.”