Ecclesiastical Insurance Office public limited company 24 September 2024
Ecclesiastical Insurance Office public limited company (“Ecclesiastical” or “Ecclesiastical Insurance Office plc”), the specialist insurance group1, today announces its 2024 interim results. A copy of the results will be available on the Company’s website at www.ecclesiastical.com
Financial highlights
· Gross Written Premiums (GWP)2 continued to grow, rising to £301.1m (H1 2023: £288.2m). This was driven by new business wins and supported by strong retention and customer loyalty. In the UK and Ireland, GWP rose by 11.3% from £190.9m to £212.5m.
· For general insurance, we reported a strong underwriting profit2 of £20.4m (H1 2023: £0.3m). This result benefited from a more stable claims environment thanks to fewer major events compared to H1 2023.
· Overall profit before tax of £41.4m (H1 2023: £10.2m), achieved through a substantial insurance service result of £36.8m (H1 2023: £23.0m) and boosted by an investment result of £34.6m (H1 2023: £14.7m), driven by fair value movements in our equities portfolio.
· Our capital position remains strong with Moody’s and AM Best ratings remaining Stable. This gives confidence we can deliver for our customers, clients and partners whilst maintaining our capital strength.
Key achievements
· Ecclesiastical UK continued its growth into new sectors with the launch of its new Office Professions product in July 2024, for office-based businesses providing professional services, and widened its leisure appetite following a successful launch in 2023.
· Our insurance businesses continue to be recognised for their award-winning service with prestigious awards including:
o Ecclesiastical UK home insurance was placed top of the Fairer Finance table in its Spring ratings and first for both customer trust and customer happiness.
o Ecclesiastical UK once again received the Gracechurch Service Quality Marque, reflecting its outstanding service quality for claims handling.
o Ecclesiastical Ireland received the Investors in Diversity Bronze Award.
o Ecclesiastical Canada was again named one of Greater Toronto’s Top Employers for 2024, achieving the title for the sixth consecutive year. The business also received the Excellence in Philanthropy & Community Service and P&C Insurer of the Year awards at Insurance Business Canada’s Excellence Awards 2023.
· As part of our mission to contribute to the greater good of society, we announced a grant of £8m to our charitable owner Benefact Trust in respect of our first half performance. This brings the total given to good causes in the past decade to £231m – and keeps us on course to deliver our ambition to give £250m to good causes by the end of 2025.
· We continued to invest in our teams, promoting and recruiting talent across all our territories, as part of our drive to be a world-class employer.
Mark Hews, Group Chief Executive Officer of Ecclesiastical, said:
“We are clearly delighted by these results and would like to thank all our supporters for their help in growing our business so that we can give even more to good causes, transforming lives and communities in this country and abroad. The first half of 2024 saw continued positive trading momentum in the UK with excellent growth in premiums, both in our existing specialisms and in our new Leisure sector, which launched last year and has driven 20% of our open market new business.
“In the UK we continued our expansion into adjacent sectors with the launch of our Office Professions product in July 2024, targeted at all clerical-based office risks, such as accountants, architects, estate agents, lawyers, insurance brokers, call centres, graphic designers, and consultants. Alongside this we expanded our distribution capabilities with the introduction of our digital portal Schemes+ to help brokers manage their schemes more effectively.
“For general insurance, we reported a strong underwriting profit of £20.4m, helped by a more stable claims environment and our continued focus on protecting our prestigious portfolio of heritage properties, both in the UK and abroad. As a specialist insurer, we are trusted to safeguard some of the nation’s most beloved buildings, and we take that responsibility very seriously, helping our customers to manage their risks effectively through our best-in-class risk management advice and guidance. And when the time comes for a customer to make a claim, our award-winning claims team is there to help. Our commitment to excellent customer service was recognised with multiple award wins in the first half of the year, including being awarded Gracechurch’s Service Quality Marque for the third year running, and Fairer Finance’s Home Insurance First Place Gold Ribbon for the 19th consecutive time.
“As a business with a purpose to contribute to the greater good of society, we donated £8m earlier this year to charity in respect of 2023 performance and I’m delighted that we’ve agreed to donate a further £8m, which will fund grants to those most in need in society. Thanks to all our supporters, we are now the third biggest corporate donor to charity in the UK3 and this brings our total giving since 2014 to £231m and keeps us on course to meet our ambition to give £250m to good causes by the end of 2025.
“I’d like to thank all our colleagues, brokers, customers, and partners for their continued support for our unique business. Every one of them is helping us give even more to good causes and making a real difference in the world.”
1 The ‘Group’ refers to Ecclesiastical Insurance Office plc together with its subsidiaries. The ‘Benefact Group’ and ‘wider group’ refers to Benefact Group plc, the immediate parent company of Ecclesiastical Insurance Office plc, together with its subsidiaries. The ‘Benefact Trust’ and ‘the Trust’ refers to Benefact Trust Limited, the ultimate parent undertaking of Ecclesiastical Insurance Office plc.
2 The Group uses Alternative Performance Measures (APMs) to help explain performance. More information on APMs is included in note 17.
3 Directory of Social Change’s The Guide to UK Company Giving 2023/24.
Financial Highlights
| H1 2024 | H1 2023 | ||
| Insurance revenue | £311.7m | £284.1m | |
| Insurance service result | £36.8m | £23.0m | |
| Net investment result | £34.6m | £14.7m | |
| Profit before tax | £41.4m | £10.2m | |
| Group combined operating ratio4 | 88.6% | 99.8% | |
| 30 June 2024 | 31 December 2023 | ||
| Net asset value | £648.5m | £628.9m | |
| Solvency II capital cover (Ecclesiastical solo) | 275% | 254% | |
4 The Group uses Alternative Performance Measures (APMs) to help explain performance. More information on APMs is included in note 17.
The Group has achieved an excellent six months of trading with premium growing 4.5% to over £300m and a Combined Operating Ratio (COR) of 88.6% (H1 2023: 99.8%). Underwriting performance has benefitted from benign weather claims and, together with a strong net investment result to £34.6m (H1 2023: £14.7m), has resulted in a profit before tax of £41.4m (H1 2023: £10.2m).
On an IFRS basis, the Group reported an insurance services result of £36.8m (H1 2023: £23.0m).
General Insurance – UK and Ireland
UK and Ireland reported GWP growth of 11.3% to £212.5m in the six months to 30 June 2024 (H1 2023: £190.9m). This has been driven by strong retention, supported by targeted rate strengthening and new business wins. The business reported an underwriting profit of £18.0m and a COR of 84.2% (H1 2023: £6.5m loss, COR 106.6%).
The underwriting profit at half-year benefited from benign weather claims. In comparison, H1 2023 was adversely impacted by a large claim in relation to the St Mark’s Church fire in London.
General Insurance – Canada
The Canadian business reported GWP of £37.7m, a reduction of 4.0% in local currency compared to the prior half year period of £40.3m. This was primarily as a result of increased competition in the retirement sector and the non-renewal of certain accounts.
The business reported an underwriting profit of £6.3m (H1 2023: £5.0m) and a COR of 83.2% (H1 2023: 86.8%), driven by favourable development of prior period claims. The current period loss includes the impact of the ‘Western Deep Freeze’ weather event in January but remains in a strong position.
General Insurance – Australia
The Australian business reported an 8.3% decrease in local currency GWP to £47.9m (H1 2023: £54.2m), primarily driven by lapses in line with strategy and lower retention in SME and mid-market portfolios. The business reported an underwriting loss of £1.1m (H1 2023: £0.5m) and a COR of 104.9% (H1 2023: 97.8%), largely driven by adverse development of historical business interruption claims.
Investment Returns
There was a significant improvement in the net investment result for the first half of the year resulting in a profit of £34.6m (H1 2023: £14.7m). Investment income increased to £24.6m (H1 2023: £21.1m). Fair value profits of £10.1m in the first half of the year (H1 2023: £6.4m losses), were primarily due to unrealised profits on unlisted equities.
The Group continues to navigate the uncertain geopolitical and economic environment and remains committed to its long-term investment philosophy. The Group is well-diversified and relatively defensively positioned.
Life Business
The life business provides products which give guarantees for pre-paid funeral planning products sold by the Funeral Planning business in Benefact Group (Ecclesiastical Planning Services Limited). A legacy book remains closed to new business. The life business reported a profit before tax of £0.3m at the half year (H1 2023: £0.5m).
Balance Sheet and Capital Position
In the first half of the year, total shareholders’ equity increased by £19.6m to £648.5m. Underwriting profits and investment returns were offset by a £8.0m charitable grant paid to the Company’s ultimate shareholder, Benefact Trust Limited, in relation to 2023 performance and a dividend on preference shares. Our capital position remains robust with Solvency II capital ratio cover for Ecclesiastical solo increasing to 275% from 254%.
Strategic Highlights
The Ecclesiastical Insurance Office Group (Group) is part of the wider Benefact Group, a diverse family of specialist financial services businesses. The Benefact Group is proud of its owner, the Benefact Trust, and inspired by its charitable purpose. The businesses within Benefact Group are specialists within their own field united by a common purpose to give all available profits to charity and are driven by a common ambition to be trusted by customers, clients and business partners to do the right thing. These principles set the Benefact Group apart from others in the financial services sector, as its portfolio of businesses seek to contribute to the greater good.
Stretching targets were set for all general insurance teams to achieve profitable gross written premium growth across all geographies. This planned growth enables the insurance businesses that comprise the Ecclesiastical Insurance Office Group to contribute to the Benefact Group’s ambition to ‘Grow to Give’.
As part of the Benefact Group, the Group is aligned with its overarching strategy and strategic focus. The Group has continued to strengthen its positioning as a trusted specialist in its markets, leading to growth through developing its proposition, entering new segments and by improving efficiency.
This strong performance is underpinned by strategic investment in its capabilities, operations and people to drive business benefit and in turn enable charitable giving to its communities. This investment is made possible by the Group’s resilience and financial strength.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Group and our approach to managing them are outlined in our latest annual report which is available on www.ecclesiastical.com and in note 4 to these condensed financial statements. There has been no change to the principal risks and uncertainties since the year end.
Board Changes
During 2024, we are focusing on reshaping the Boards of Ecclesiastical Insurance Office plc and Benefact Group plc to increase the independence of Ecclesiastical Insurance Office plc and have reduced the commonality of membership. James Coyle, Maria Darby-Walker and the Venerable Karen Best were appointed to the Board of Ecclesiastical Insurance Office plc in May, July and August 2024 respectively. On 24 September 2024 Rita Bajaj and Chris Moulder stepped down from the Board of Ecclesiastical Insurance Office plc, but will continue as directors of Benefact Group plc, and Sir Stephen Lamport, Angus Winther and Francois Boisseau stepped down from the Board of Benefact Group plc but will continue as directors of Ecclesiastical Insurance Office plc.
In addition, Denise Cockrem, Chief Financial Officer, retired in June 2024. We are grateful for all that Denise has helped the Group achieve during her six years in the role. A process to appoint her successor is underway and Mark Bennett, Chief Actuary, is acting Chief Financial Officer in the interim.
Outlook
As we look ahead to the remainder of 2024, we remain cautiously optimistic about the prospects for our business amidst a complex and evolving economic landscape.
We are committed to deliver profitable growth so that we are able to give more and are focussing on ways in which we can deliver even better customer value and reach additional customers and customer groups while retaining our strong underwriting and risk management disciplines.
Sustainability and corporate responsibility are integral to our strategy. We are making significant strides in our sustainability initiatives. These efforts are expected to drive long-term value creation and align with evolving regulatory requirements and stakeholder expectations.
There is continued investment in updating the systems that support underwriting. Other investment has focused on continued improvement in organisational resilience and exploiting data as an asset. Alongside this, there has been a significant focus on building a World Class Team, with the Group committed to building on its inclusive culture where every colleague feels valued, respected and treated fairly.
Everything that the Group does is aimed at contributing to the greater good. Our charitable giving and our Movement for Good programme will continue to transform lives for the better.
By order of the Board
Mark Hews
Group Chief Executive
24 September 2024