Higher expenses cut Swinton’s pre-tax profit

Swinton Holdings made a profit before tax £33.9m in the year to December 31 2010, down 6% on the £36.1m it made the previous year. While turnover increased 2.3% to £278.1m from £271.7m, this was offset by a 3.6% increase in administrative expenses to £238.2m from £230.1m.

However, Swinton chief executive Peter Halpin said the increased expenses were generated by investments in a number of projects during the year which did not come on line until towards the end of 2010 and did not start bearing fruit until 2011.

These included developing new products, improving systems and making electronic documentation available to clients. “There are some higher costs in there which didn’t in the year produce a significant amount of income but we are seeing that coming through in this year’s results,” Halpin said.

Halpin added that Swinton was on track for an improved result in 2011, thanks in part to the new products but also because customers becoming more comfortable with price increases in personal lines. This requires less re- broking and discounting of business.  

“As a consequence more of the premium increases that insurers are putting through are coming through onto our own bottom line,” he said. “This year we are looking at a much improved position against where we were last year.”