Ecclesiastical announces 2013 annual results
Group capital remains strong at Ecclesiastical with Group net assets at a record high of £494m and pre-tax profits of £66.9 million (pre-tax profits were £37.8 in 2012) It has reported a strong investment performance with the investment management team continuing to outperform the market and deliver excellent returns.
It also reported an improved underwriting result as the decisive actions taken in 2013 started to have a positive impact and a return to profit for the UK GI business reflecting excellent results from the property account.
Group investment returns of £73.8m (£56.6m in 2012) played a significant part in delivering the overall Group profit.
Commenting on the results, Ecclesiastical’s Group Chief Executive Mark Hews said: “This is a very positive set of results for our Group following a year in which we have re-focused and restructured a number of our businesses. The pre-tax profit of £66.9m is a significant increase on our 2012 results and is based on strong investment returns and improvements in our Group-wide underwriting performance. The reduction in our GWP is in line with our expectations and is a result of the actions taken to reposition and refocus our Group, not least our exit from writing motor insurance in the UK and overseas.
“Our award-winning investment management business, Ecclesiastical Investment Management (EIM) delivered an impressive result yet again. Performance was ahead of budget and well above that achieved in the market as a whole. EIM also had another successful year in attracting external funds, increasing its net inflows to nearly £100m and ending the year with funds under management at £2.2bn. The team continued to receive market recognition for its performance by being voted Best Ethical Investment Provider of the Year for the fifth year running by MoneyFacts. This is a key area of growth for us in the period ahead.
“The year saw step change improvement in the results for our General Insurance division with the underwriting loss of £8.2m being a third of that reported in 2012. Over the past year the new management team have taken decisive action to address the issues we identified in 2012 and early 2013 and I am confident that we will see a further improvement in our results across all territories as we get a full year’s benefit from the steps we have taken.
“The improvement in the UK underwriting profit to £9.8m, with a COR of 95.3%, demonstrates how our decisive action and stronger focus on core sectors has led to improved underwriting performance. It is the result of action taken in a number of areas: reviewing our risk appetite across our target markets to ensure that we only compete where we have knowledge and expertise, reviewing key portfolios, exiting unprofitable lines of business, and reorganising our teams into stronger regional hubs to make it even easier for brokers and customers to do business with us. Some of the decisions we have had to make have not been easy, but have been necessary to enhance the grants we make to charity and other good causes.
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“Our overseas General Insurance businesses experienced mixed results for the year. Our Irish operations were affected by liability challenges similar to those experienced in the UK. We have tackled these head-on and are already seeing improved performance. In Australia, our underlying performance improved substantially, but the net result was impacted by high reinsurance costs. Again we have taken steps to address this issue and have put in place a new reinsurance arrangement taking effect from 2014. Our Canadian business returned a credible result despite being impacted by the severe flood events in Toronto and Calgary.
“We achieved a significant amount during 2013, often in challenging circumstances, through the hard work and commitment of everyone at Ecclesiastical. Although there is much to do in the next few years, we remain optimistic and confident that we will be successful in achieving our ambitious and central goal of giving £50m to charity over the next three years.”