UK General’s yearly profit fall “reflects structural changes”

In accounts due to be filed at Companies House, the Leeds-based insurer delivered a “resilient” performance during which time it changed its primary capacity provider and prepared for a change of ownership, according to chief executive, Karen Beales.

She said: “Our work in the UK General ‘engine room’ last year is now paying off in 2017, as we have improved gross margins by 7% as a result of writing better quality business and optimising portfolio performance.”

The operating profit for the year ending March 2017 is down from the year before. In the year ending March 2016, operating profit was £9.5m.

So, that is a fall of 36%, but according to Beales, this was expected.

She said that a fall in UK General’s operating profit reflected structural and investment changes to the business during 2016.

She explained that UK General invested an extra £1.1m to create the virtual insurer structure. “This includes new investment to strengthen the governance framework, further investment in IT and technology, and investment in actuarial pricing capability to enhance risk selection and pricing sophistication. We believe our eight-strong actuarial team is unique in the MGA sector.”

She also outlined that this is part of a long-term plan for the business:

“As the market focus moves from distribution to capacity, we have already invested in high quality people and new technology to power our ambitious growth plans. Our aim is to deliver EBITDA of £20m by 2020.”

Commenting on the results, John Spencer, chairman said: “This is a solid performance during a period of major change for the business. I am pleased with our positioning as a profit-orientated, market-leading business that bridges the gap between MGAs and insurers, and I remain confident in our ability to achieve our long-term aims.”