Ecclesiastical Insurance Office plc (“Ecclesiastical”), the specialist financial services group, today announces its full year 2022 results. A copy of the results will be available on the Company’s website at www.ecclesiastical.com

Group overview

· Driven by our purpose to contribute to the greater good of society, Ecclesiastical continued to give to good causes in 2022, amounting to £22.7m. We are now proud to be the third largest corporate donor in the UK¹.

· Despite the challenging external environment, our businesses performed strongly in 2022. Gross Written Premiums (GWP) grew 15% from £486m to £559m, driven by new business wins, strong retention and rate strengthening, along with the impacts from the inflationary environment.

· Strong underwriting profit of £27.4m, a significant increase on the previous year of £8.8m.

· Operating performance was offset by fair value losses on our investment portfolio due to stock market falls and higher interest rates which was partially offset by the impact of discounting on reserves, leading to an overall group loss before tax of £4.8m (2021: £79.2m profit). 

· We remain in a strong capital position and our credit rating agencies affirmed our excellent and strong credit ratings in the second half of 2022. We recently exited our relationship with S&P and added Moody’s to join AM Best as our agencies.

· We continue to lead the industry in service with 98% of customers satisfied with the service they receive from Ecclesiastical. For a second year running, independent research consultancy Gracechurch put Ecclesiastical ahead of all other insurers for claims service. 

· We continued to receive external awards, recognising the Group as a trusted and specialist financial services organisation. This included being named as the UK’s most trusted home insurer for the 16th time by independent ratings agency Fairer Finance, and our Canadian team was named one of the Top Employers for Young People for the ninth consecutive year.

Mark Hews, Group Chief Executive Officer of Ecclesiastical, said:

“Last year was a transformational year for our Ecclesiastical Group family. We launched a new brand, prepared for a new Group structure, new strategy, new governance framework, new systems, and strengthened our leadership. Our immediate owner, Ecclesiastical Insurance Group, became Benefact Group, heralding an exciting new chapter for our family of businesses, united by a common goal to give all available profits to good causes.

“Despite the challenging external environment, our businesses performed strongly in 2022. In general insurance we saw excellent premium growth of 15%, driven by new business wins, strong retention and inflationary pressures. The GI Underwriting result was £27.4m, a significant increase on the previous year of £8.8m, which was lower due to strengthening of PSA reserves. This gives a combined operating ratio of 91%², which compares favourably in the insurance market.

“Our strong operating performance was offset by fair value losses on our investment portfolio, caused by volatility on the stock markets. In addition to these fair value losses, the results include a credit from a fair value gain on an equity investment and a credit arising from a change to our discounting accounting policy. This led to an overall group loss before tax of £4.8m (2021: £79.2m profit). 

“We were able to give a further £22.7m to charitable causes in 2022. Our combined giving with Benefact Trust has helped thousands of charities in recent years, changing countless lives and communities for the better. Many of those charities, along with His Majesty King Charles III, joined us at Westminster Abbey last summer for a Service of Thanksgiving to celebrate our £100m giving milestone. It was a proud moment for our business, and we have therefore raised our ambition, and have set a new cumulative target to give £250m to good causes by the end of 2025. We are now the third largest corporate donor in the UK, with an ambition to be first.

“Inspired by the impact of our giving on so many, we are extremely ambitious for the future. This year will see continued investment in new systems, helping to deliver even better service and value for our customers and brokers.  We will pursue growth opportunities, both in our existing sectors and in new niches where we can leverage our specialist expertise. We will make significant investment in digital propositions, helping to build our distribution capability and reach, as we seek to find ways to meet our customers’ changing needs. We will also continue to prioritise risk management innovation, exploring new ways to protect our customers from losses, particularly from the growing threat of climate change.

“On behalf of the Board and thousands of our beneficiaries, we say a heartfelt, sincere “thank you” to all our customers, business partners and dedicated colleagues for their exceptional support. With a new brand, a clear strategy for growth and a renewed sense of confidence, we go into 2023 energised and inspired to work together for our customers and society.”

^1. Directory of Social Change Guide to UK Company Giving 2023/24

^2. Alternative performance measure, refer to note 9 to this announcement for further explanation

ECCLESIASTICAL INSURANCE OFFICE PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

The Company has now approved its annual report and accounts for 2022.

This Annual Financial Report announcement contains the information required to comply with the Disclosure and Transparency Rules, and extracts of the Strategic Report and Directors’ Report forming part of the full financial statements.

The financial information set out below does not constitute the Company’s statutory accounts for the year ended 31 December 2022. The annual report and accounts will be available on or before 28 April 2023 on the Company’s website at www.ecclesiastical.com . Copies of the audited financial statements are also available from the registered office at Benefact House, 2000 Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester GL3 4AW.

A copy of the Company’s statutory accounts for the year ended 31 December 2022 will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

Chair’s statement

Despite the challenging environment, 2022 was a year of celebration for Ecclesiastical Insurance. We marked the achievement of giving £100m to good causes over the past five years, with a service of thanksgiving at Westminster Abbey – an incredible moment in the company’s 136-year history that saw hundreds of beneficiaries and supporters, among them King Charles III, come together to celebrate our movement for good.

It also saw the successful launch of the Benefact brand, providing not just a new name for Ecclesiastical’s parent Group and Trust, but a renewed sense of energy and focus on our purpose to contribute to the greater good of society. Speaking to customers and brokers over the past few months, it’s clear the new name resonates and has landed well in our markets. It’s a fantastic achievement that we should all be proud of.

Of course, 2022 also brought its challenges. The return to prosperity that many of us hoped for after the pandemic failed to materialise as economic and political events pushed us into a cost of living crisis, while the devastating war in Ukraine continues to take its toll on innocent lives. In these difficult times, our mission to help those most in need in society is more important than ever.

In response to both challenges, our charitable owner the Benefact Trust moved swiftly to support charities on the frontline. In March it announced £1m of funding to give immediate and longer-term support to people fleeing the devastating conflict in Ukraine. In December, the Trust announced a £500,000 funding package to support charities working to keep people safe and warm this winter.

This giving is only possible thanks to the customers, brokers and colleagues that support Ecclesiastical Insurance Office Group, which gives all its available profits to charities and good causes. I’m pleased to say we granted £20m to Benefact Trust in 2022. Alongside this we gave £2.7m through our direct giving programmes in the UK, Ireland and Canada, helping thousands of charities to make a difference in their communities.

This combined giving brings us closer to our ambition of being the UK’s biggest corporate donor with a cumulative target of giving £250m to good causes by the end of 2025.

Results

Despite the challenging economic conditions, our businesses performed well in 2022. We continued to attract and retain prestigious customers across all divisions, which helped to drive double-digit premium growth. We also reported an improved underwriting result, with a profit of £27.4m. We reported an overall loss before tax of £4.8m as our results were affected by investment losses, due to falls in global markets.

Achievements and reflections

I’m now in my fourth year as Chairman and I’m delighted with the progress we’ve made as a business. We’ve invested considerably over the past few years, from launching new brands for the General Insurance business and the Group, a new head office, and new systems and technology to improve the broker and customer experience. The launch of our new General Insurance system last year was a major milestone and an incredible achievement by everyone involved in the project.

I’m also pleased that we announced our climate commitments in spring last year, outlining our roadmap to achieve net zero by 2040. In my report last year, I talked about the importance of responding to the issues of sustainability and climate change and as a responsible business, we are committed to making a positive environmental impact in the world. Much work has taken place over the past 12 months to understand our climate impact and identify the measures we need to take to reduce our carbon emissions. This has included training sessions for the Board, which have helped deepen our understanding of how we can do the right thing as a business.

None of our achievements would be possible without the commitment of our colleagues and I want to thank them for all their efforts in 2022. Our customer satisfaction and Net Promoter Scores remain high and the Group again achieved Best Companies two-star status, demonstrating outstanding employee engagement. It’s always pleasing to see this commitment and effort is recognised by others and this was reflected in 18 awards last year including products, service quality, risk management, marketing and customer engagement.

I was fortunate to visit our offices in Australia and Ireland and spent time with our excellent teams, learning how they’re working hard to improve our services to our brokers and customers.

Looking ahead

While some companies are retrenching in the face of economic difficulties, Ecclesiastical has set itself an ambitious target to double in size. The strategy announced last year provides a clear roadmap to achieve this stretching goal and I’m excited by the potential within the business to grow.

Across our businesses, we have identified new areas of growth, both in existing segments and in new ones, and we have the ambition and capacity to benefit from these opportunities.

This year will see continued investment in new systems to improve the customer and broker experience, and we will continue to invest in new technology to drive innovation and growth to enable yet more giving to charities and communities. In particular, we will continue to invest in our risk management offering so that we can help to protect our customers from new and emerging threats.

We will also continue to invest in our people as we seek to become a world-class employer. We want to build a workplace where everyone feels welcome and can realise their full potential, while helping to make a difference to the lives of our customers and communities.

Board activity

For the first time since I became Chairman, there have been no changes to the board in the past 12 months. It is a genuine pleasure to work with such a talented group of individuals who bring a range of different experience and perspectives. I would like to thank all of them for their service over the past year.

The future

It is an immense privilege to be a part of a business with such a special purpose of contributing to the greater good of society. With the new strategy in place, I believe we are well positioned to grow our business so that we can give more to help those most in need.

Chief executive’s statement

For over 135 years, Ecclesiastical has understood what matters most to our customers and communities.

Trusted to protect and preserve much of the nation’s irreplaceable heritage and history, we’re distinguished in the financial services industry by our specialist expertise, our caring approach and our unique charitable purpose. Unlike many other businesses, we prefer to measure success not in sales or profits but in the amount we give to communities to help transform lives for the better. Guided by this purpose, we are driven to grow the business, so that we may give even more to good causes.

Last year was a transformational year for our Ecclesiastical Group family. We launched a new brand, prepared for a new Group structure, new strategy, new governance framework, new systems, and strengthened our leadership.

In particular, our immediate owner, Ecclesiastical Insurance Group, became Benefact Group, and our ultimate parent, Allchurches Trust, became Benefact Trust.

The launch of the Benefact brand is a momentous occasion for our charity-owned Group and at the start of 2023 Benefact Group announced a simplified structure to build on this to help us realise our growth ambitions. This new structure, which aligns our businesses to our three divisions – specialist expert Insurance, responsible and sustainable Investment Management and Broking & Advisory – provides the foundation for our family of businesses to grow even more, to give even more.

By simplifying and streamlining the Benefact Group structure, we have created dynamic, empowered businesses with clarity of focus, a compelling purpose, and the ideal operating environment for each of our new operating divisions to thrive. This is in stark contrast to some other business models where decision making can be centralised, slow and prioritise profits ahead of customer’s interests.

Ecclesiastical Insurance is now proudly part of the Benefact Group, a family of financial services businesses with a common goal to give all available profits to good causes. We are here to protect communities and transform lives.

Building a movement for good

A few years ago we set ourselves (and subsequently met) a stretching ambition to give £100m to charity. This level of giving means that Benefact Group is now the third largest corporate donor to charity in the UK. An amazing achievement when you consider that there are over five million companies.

It means that our ultimate parent company, Benefact Trust, is now one of the biggest grant making charities in the UK and is able to provide transformative funding to charities both in the UK and abroad as, for example, they did in response to the crisis in Ukraine. We thank the Trust enormously for the outstanding work they undertake.

Indeed, our combined giving has helped more than 10,000 charities in recent years, changing countless lives and communities for the better. Many of those charities, along with His Majesty King Charles III, joined us at Westminster Abbey last summer for a Service of Thanksgiving to celebrate our £100m giving milestone. It was a proud moment for our business and, for me, a rare moment to reflect on our incredible progress.

Hearing moving testimonials about the life changing work of the charities we support, and taking inspiration from the Parable of the Good Samaritan, we would like to go further and hold out a hand to many, many more.

We have therefore raised our ambition, and have set a new cumulative target to give £250m for good causes by the end of 2025.

Delivering for our customers

Our giving is only possible thanks to the support of our brokers, customers, investors, business partners, and the tremendous efforts of our colleagues. For generations, we have been trusted to protect many of the UK’s iconic treasures, from palaces, castles and stately homes to cathedrals, churches and schools. Today we insure world-renowned buildings such as St Pauls Cathedral, Royal Albert Hall, Chatsworth House and Westminster Abbey, the home of the coronation. We pride ourselves on our specialist expertise in our markets and our commitment to customer service.

As an insurance company, our goal is to protect our customers through our specialist risk-management advice and insurance cover. But as a trusted expert committed to creating a movement for good, our dedication to our customers goes beyond that.

Many of our church and charity customers have seen their incomes fall due to the challenging economic climate and we recognise the difficulties they face. We have established resources to help these organisations raise much-needed funds and we invest significantly in our risk management services to help customers reduce the risk of losses occurring. And if the worst happens, our expert claims team are always there for our customers when they need us most.

As the UK’s leading insurer of Grade I listed buildings, we are passionate about protecting Britain’s heritage. We know the key to protecting our built environment from climate change is adaptation and resilient repairs. However, the challenge for heritage buildings, compared to modern properties, is that adaptation can be more complicated to do sensitively. We are working to be at the forefront of this issue and collaborating with partners like English Heritage to research and understand this important issue better. The threat of climate change is one of the biggest challenges facing our customers and communities. We are committed to making a positive environmental impact and we recognise the importance of reducing our own climate impact as well as supporting our customers to reduce theirs. Last year we announced our climate commitments to achieve net zero by 2040 and we are making good progress against our targets, which are detailed in our Responsible Business Report.

Providing exceptional service

Our customers tell us that our expert service and our compassion makes us stand out in the insurance industry. In the UK, Ecclesiastical retained its top spot in the Fairer Finance Home Insurance league table for a record sixteenth time and remains the UK’s most trusted home insurance provider. It was also named Risk Management Specialist Company of the Year – Large in the CIR Risk-Management Awards. Ecclesiastical Canada was named one of Canada’s Top Employers for Young people for the 10th consecutive year and won Excellence in Claims Service in the Insurance Business Canada Awards.

Also, for a second year, I’m delighted the independent research consultancy, Gracechurch, put Ecclesiastical ahead of all other insurers for claims service. In addition, an incredible 98% of customers are satisfied with the service they receive from Ecclesiastical, whether that is making a claim or experiencing our risk management service. The Net Promoter Score, which measures how likely a customer is to recommend a company’s products and services, for Ecclesiastical Insurance puts us ahead of many well-known and respected brands.

Financial performance

Despite the challenging external environment, our businesses performed strongly in 2022. In general insurance we saw excellent premium growth of 15%, driven by new business wins, strong retention and inflationary pressures. In Investment Management we saw record gross inflows of over £1.2bn as we launched new funds; net inflows place us well inside the top 10 fastest growing asset managers in 2022.

Given our overall financial strength and excellent solvency position, we hold a significant portion of our investment portfolio in real assets such as property and infrastructure. Whilst we expect this to lead to positive real returns over the long term, it can introduce some volatility into annual reported results.

With our long term approach we look through and beyond this short term volatility, however it did mean that, in 2022, our strong operating performance was offset by fair value losses from our assets of around £94.1m on our investment portfolio, leading to an overall Group loss before tax of £4.8m (2021: £79.2m profit). In addition to these fair value losses, the results include a total credit of £30m from a fair value gain on an equity investment and a credit arising from a change to our discounting accounting policy. More detail on these items is included within the Chief Financial Officer’s Report.

The GI Underwriting result was a profit of £27.4m, a significant increase on the previous year of £8.8m, which was lower due to strengthening of PSA reserves. This gives a combined operating ratio of 91%, which compares favourably in the insurance market.

We were able to give a further £22.7m to charitable causes, including Benefact Trust, in 2022. This takes our cumulative giving to £198.2m against our £250m target.

We remain in a strong capital position and I’m pleased that our credit rating agencies affirmed our excellent and strong credit ratings in the second half of 2022. In line with normal business practice, we routinely review our rating agencies and we have now appointed Moody’s to join AM Best as our two agencies for the next period.

Strategic ambitions

To paraphrase T.S. Eliot…

It is only when one tries to go too far, that one finds out how far it is possible to go.

Inspired by the impact of our giving on so many, we are extremely ambitious for the future. We have launched an exciting new strategy to invest, energise and grow our Group across all our divisions and all our territories. With a strengthened rate environment, tightened insurance capacity and an increasing market focus on Environmental, Social and Governance (ESG) performance, the timing to push for growth has arguably never been better.

This year will see continued investment in new systems, helping to deliver even better service and value for our customers and brokers. We will pursue growth opportunities, both in our existing sectors and in new niches where we can leverage our specialist expertise. We will make significant investment in digital propositions, helping to build our distribution capability and reach, as we seek to find ways to meet our customers’ changing needs. We will also continue to prioritise risk management innovation, exploring new ways to protect our customers from losses, particularly from the growing threat of climate change.

To achieve all of this we need to be at our best personally and professionally and we will continue to foster a culture where all our colleagues have the space to grow and perform to their full potential.

For a second year running, we were named an “Outstanding” company to work for by Best Companies following the results of our annual engagement survey. Our ambition is to become a world-class employer, attracting, retaining and developing the best talent in the industry by creating career opportunities for every colleague, no matter what their background.

On behalf of the Board and thousands of our beneficiaries, we say a heartfelt, sincere “thank you” to all our customers, business partners and dedicated colleagues for their exceptional support. I very much hope that they are inspired when they look back at what has been achieved, and the positive impact that they have had. I certainly am.

Join our movement for good

With a new brand, a clear strategy for growth and a renewed sense of confidence, we go into 2023 energised and inspired to work together for our customers and society.

To those who are reading about Benefact Group for the first time, I invite you to join us, whether as a colleague, customer or business partner, and experience for yourself how it is possible to do business differently. There is no doubt that, together, we are creating something very special – a movement for good that touches and transforms lives in our homes, in our communities, in this country and abroad.

As we said when we filled Westminster Abbey in the presence of His Majesty King Charles III in June last year… “Individually we can all make a difference. Together, we can perform miracles.”