Ecclesiastical reports pre-tax profit despite slight COR increase

Specialist insurer Ecclesiastical has reported profit before tax of £77m for 2021 - an improvement on the pre-tax loss of £15.7m that it recorded in 2020, according to its 2021 year-end financial results, published today (18 March 2022).

However, the company also reported a small increase in its combined operating ratio (COR), rising from 95.1% in 2020 to 96.8% last year.

The insurer explained that investments across its technology platforms made up 2.8% of its COR for the last 12 months - it said that this represented “an important step in supporting the growth of our business and our customers’ needs for the long term”.

In the UK and Ireland, Ecclesiastical’s underwriting profits increased from £12.3m in 2020 to £25m in 2021. This helped the company’s COR in this region reach 85.3% in 2021, down from 92.5% in the prior year.

Speaking on these results, Ecclesiastical’s group chief executive Mark Hews said: “2021 was an outstanding year for Ecclesiastical.

“We delivered gross written premium (GWP) growth of 11% to £486m (2020: £437m), supported by strong retention and new business in the UK and Canada.

“Alongside this, we made significant progress on our strategic initiatives, despite the ongoing uncertainty in the external environment.”

A positive outlook?

Heritage, education and real estate were particularly strong growth areas in the UK and Ireland market during 2021, Ecclesiastical’s financial report noted. This was despite reported “competitive trading conditions”.

“We expect trading conditions to remain competitive, but the outlook is becoming increasingly unpredictable,” added the insurer.

Ecclesiastical also reported a net investment return of £101.2m - a strong recovery from a 2020 loss of £4.2m. The company attributed this to continued recovery in equities and its property portfolio.

“Although the easing of most pandemic-related restrictions means we entered 2022 in a very different place to the start of last year, we are still living with Covid-19 and some remaining level of uncertainty from the pandemic will likely persist,” the insurer said.

“The recent devastating events in Ukraine and the consequences of previously unthinkable international economic sanctions has led to heightened market volatility, an increased risk of inflation and risks to the supply chain.

“We will continue to manage these risks and remain alert to changes in them across all of our businesses.”