Ecclesiastical Insurance Office plc 27 September 2022
Ecclesiastical Insurance Office plc (“Ecclesiastical”), the specialist financial services group1, today announces its 2022 interim results. A copy of the results will be available on the Company's website at www.ecclesiastical.com
Group overview
- Within Ecclesiastical, there was excellent growth in Gross Written Premiums (GWP) to £261.9m (H1 2021: £226.5m), driven by new business, and supported by strong retention and rate strengthening.
- Underwriting profit increased to £16.6m (H1 2021: £2.5m).
- Our capital position remains robust with Solvency II capital cover increasing to 280% and AM Best and S&P affirming our excellent and strong ratings. A consequence of our capital strength is that we are able to hold a large diversified portfolio of equities, property, infrastructure and other investments on top of those assets held to meet our insurance and capital requirements. This is done to enhance our returns over the long term, although it can lead to short term volatility in our reported results, as it has in the first half of the year.
- Overall loss before tax of £27.3m (H1 2021: Profit before tax of £46.5m), which includes £79.8m of fair value investment losses (H1 2021: £34.3m gains) as a result of adverse market conditions. Net investment losses were £26.6m (H1 2021: £58.2m profit).
- As part of the Benefact Group of companies, Ecclesiastical remained focused on its charitable ambition to grow to give. The Group has now given £182m2 to charity against its target of donating £250m by the end of 2025.
- This includes a grant of £5m to our owner Benefact Trust Limited in respect of 2021 performance. Alongside this, thanks to a robust underlying performance of the Group's businesses, we're announcing a further £5m will be granted to our charitable owner.
- Our donations are benefiting charities and communities all over the UK and Ireland, Canada and Australia, and also helping to tackle current issues such as the war in Ukraine and cost of living crisis in the UK.
- Our parent company Benefact Group plc published its climate commitments in March, setting out a roadmap to achieve net zero (direct and indirect) by 2040. This includes an ambitious commitment to achieve net zero for direct emissions by the end of 2023 and to become net negative for direct emissions by the end of 2025.
- Continued external recognition of the Group as a trusted and specialist financial services organisation. This included being named as the UK's most trusted home insurer for the 15th time by independent ratings agency Fairer Finance, and our Canadian team was named one of the Top Employers for Young People for the tenth consecutive year. Ecclesiastical Financial Advisory Services won the NatWest Intermediary local hero mortgage awards – South West & Wales, while EdenTree's Responsible & Sustainable Managed Income Fund was awarded the ESG Clarity Best Multi-Asset ESG (Environmental, Social and Governance) fund.
Mark Hews, Group Chief Executive Officer of Ecclesiastical, said:
“Being owned by a charity, we measure our success less in terms of the profit we make, but more in terms of the amount we give away to good causes. Together, thanks to outstanding commitment from all our supporters, the Group have now become the fourth largest corporate donor to charity in the UK, and with additional donations made this year, we have now given £182m2 to good causes against our target of giving £250m by the end of 2025.
“In terms of Group profits, whilst we report short term losses due to investment volatility, I'm pleased to report a resilient financial performance for the first half of 2022 from our core businesses. Our business model is focused on delivering long-term sustainable profits, which allows us to withstand short-term economic pressures, and we have continued to grow the business despite the challenging environment. Our GI businesses reported excellent premium growth, driven by new business wins, and supported by strong retention and rate strengthening. This led to an underwriting profit of £16.6m, a significant increase on the previous year.
“While much of the investment industry saw outflows as investor sentiment fell, EdenTree, our award-winning responsible and sustainable investment management business, bucked the trend by growing its fee income and receiving positive net flows. Our broker businesses also performed well, with SEIB reporting solid results with a half year profit before tax of £1.9m (H1 2021: £1.7m).
“Our capital position remains strong, with AM Best and S&P recently affirming our excellent and strong credit ratings, and we continued to invest in our business. In the UK and Ireland, we saw the release of our new general insurance system, which will ultimately enable a better, faster service for our customers and brokers, and we continued to rollout our innovative Smart Properties proposition to heritage properties, schools and cathedrals, which provides an early-warning system to prevent fire and flood. I'm also pleased that Ecclesiastical Financial Advisory Services (EFAS) have signed an official partnership to provide independent financial advice to ordained and lay members of the various Church of England Pension schemes administered by the Church of England Pension Board.
“The challenging market conditions in the first half adversely affected our investment performance as equity prices fell sharply amid concerns around inflation and the on-going uncertainty in Ukraine. Our results included fair value losses of £79.8m (H1 2021: £34.3m gains) on our investment portfolio, which contributed to a net investment loss of £26.6m (H1 2021: £58.2m profit) and overall loss before tax of £27.3m (H1 2021: £46.5m profit).
“In these difficult times, we remain resolute in our vision to build a movement for good in society, helping to transform lives and communities for the better. In June, we celebrated our achievement of giving £100m to good causes with a Service of Thanksgiving at Westminster Abbey, attended by HRH The Prince of Wales, now HM King Charles III, politicians, brokers, clients, colleagues and some of over 10,000 charities that have benefited from our giving. It was a remarkable and moving occasion. It demonstrated our combined impact and inspires us to do even more.
“In the first half of 2022, we have helped hundreds of charities in the UK through our Movement for Good Awards. Our charitable owner, Benefact Trust, stepped up its giving to include a £1m funding package to support those affected by the devastating conflict in Ukraine.
“Earlier this year we granted £5m to Benefact Trust in respect of our excellent 2021 performance and we have announced a further grant of £5m to be paid in October. This will support even more people and help us achieve our new ambition of becoming Britain's biggest corporate donor.
“We are conscious of the financial pressures currently facing many of our customers. In response, we have provided fundraising resources to help churches and charities raise much-needed funds. We have also invested significantly in our risk management services, both face to face and online, to help customers protect themselves from losses, and if the worst happens, our expert claims team are always there for our customers when they need us most.
“Our charitable purpose feels even more relevant in these difficult times. It spurs us on to grow the business, so that we may give even more to good causes, and help those in society who need it most. We are actively seeking new opportunities and paths to growth in all our markets and we have the appetite and capacity to achieve this goal.”