Esure ‘on track’ as GWP grows 5% in year to date

Personal lines insurer Esure wrote gross premiums of £427m in the first nine months of 2013, up 4.8% on the £407.6m it wrote in the same period last year.

Growth in the third quarter alone was slower, with gross written premium (GWP) up 1.7% to £161.5m (Q3 2012: £158.8m).

Within this motor premiums were up 1.8% in the first quarter, which Esure said reflected its decision “to maintain pricing and underwriting discipline despite continuing tough market conditions”.

Additional services revenue (ASR), which includes add-ons, instalment interest, policy administration fees and claims referral fees, increased 0.4% to £79.3m (first nine months of 2012: £79m).

Excluding claims income, additional services revenue increased 7.5% to £72.7m (first nine months of 2012: £67.6m).

Total in-force policies as of 30 September were 1.9 million, up 8% on the 1.8 million reported on the same date last year.

On track

Esure chief executive Stuart Vann said the insurer remained “on track” to meet market expectations for the full year.

He said: “Gross written premiums grew by 4.8% in the first nine months of the year, with growth in Q3 broadly flat, in line with the guidance we provided at the half year. This has been achieved against a backdrop of a very competitive UK motor market.

“We continue to focus on disciplined underwriting and maintaining our high customer retention rates.

“This is particularly reflected in the Sheilas’ Wheels book where our customers continue to see the benefits from gender-neutral pricing. We also continued cautiously to re-enter certain segments of the motor market that we exited between 2009 and 2011.

“ASR excluding claims income has grown proportionately in line with the growth in policy count and I am pleased with the initial performance of the ‘Just in Case’ product that we launched during August.”

St Jude claims

Esure did not provide a figure for claims from the St Jude storm that hit the south of England in October. However, Vann said the estimated cost “is within the normal range of anticipated weather for Q4”.

Cautious growth

Esure’s share price tumbled below its initial public offering price after it released its first half results because the company warned of a slowdown in growth owing to the highly competitive motor market.

The competition has been driven by the introduction of legal reforms in April, including the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Laspo), which are aimed at reducing claims.

In its third quarter interim management statement, Esure said it continued to take a cautious approach to growing in the segments of the UK motor market that it withdrew from during the period of rising personal injury claims.

The company added: “As was indicated at the interim results in August, it is still too soon to judge the full impact of the civil justice reforms and Laspo, and the group will continue to monitor developments.

Home development

Esure also said it remains focused on writing low-risk home business in what is also a highly competitive market.

Home premium was up 4.2% in the first nine months of 2013, which Esure said was driven by “targeted pricing in the core policy and tactical price reductions in home additional insurance products”.