Ecclesiastical to put up rates following £14.4m loss

Ecclesiastical plans to put its rates up across the board after making an underwriting loss of £14.4m in the first half of 2012 (H1 2011: loss of £6m), according to UK & Ireland managing director Steve Wood.

The specialist churches and charities insurer posted a UK combined ratio of 100.2% during the period (H1 2011: 94.4%) after taking a big hit from the bad weather that has swept across the UK, including the floods in the second quarter and weather related losses from the first quarter.

The UK floods cost Ecclesiastical between £4m and £5m, said Wood.

Wood said that the insurer also suffered an deterioration in its employer and public liability result with an increase in slip and trip type claims and losses in its care account.

As a result, he said Ecclesiastical had not renewed six of its top seven care groups because they couldn’t carry the terms needed and other insurers were offering lower premiums.

“In general our focus is very much on underwriting disciplines and putting rates up where we can in household and motor and selectively in commercial property as well as liability,” he said.

“We have had a fairly good year given the market conditions and we have seen some solid growth in the education and charity business and also property investors, which is a new area for us which has started very well over the last 12 months or so.”

Wood said that rates needed to go up in liability by a minimum of 10% and, on average, between 10 and 30% plus depending on the risk. In motor and household he said there would be double digit increases. He said it would be less in other lines.

Wood said most of the growth came from the education business on the back of underwriting a number of academies through local authority arrangements.

Household, in contrast, he said, had suffered from the bad weather events in the first half of 2012, which included a £4m loss from a fire at a high net worth private dwelling.

Wood said the investment side of the business had held up well with Group investment returns of £22.3m in the first half of the year (H1 2011: £24.3m) despite a stagnant stock market where the FTSE had only moved one point between the start of the year and the end of June.

He said the £14.4m Group underwriting loss was down to the catastrophes in Australia resulting in a £8m underwriting loss and the company’s exit from New Zealand which cost it £6m.

“We will be maintaining our focus as a specialist through our good reputation and brand recognition, particularly in charity, property investors, education and faith,” he said.