SPECIALIST motor insurer ERS is in line to achieve a full year profit for the second year as it draws to the close of its transformation phase.
At half year, the Aquiline-owned Lloyd's managing agent, which runs the motor-focused Syndicate 218, has been impacted by the last of its transformation costs and a shortfall investment income, resulting in a small loss for H1.
Highlights:
• ERS reported a half year loss of £2.8m, reflecting the final stage of transformation and the impact of reduced investment income.
• GWP unchanged from 2014 HI.
• ERS’ transformation program is currently on plan, as proposed in April 2013 at the point of change of control and purchase by Aquiline from IAG, and is due to complete by the end of 2015.
ERS’ reported half year loss of £2.8m compares with a profit in 2014 of £1.2m at the same point last year (£23.6m loss at half year 2013).
The largest difference was investment return 2015 H1 was 0.4% compared to 1.1% for the same period 2014, impacted by significant volatility in the investment markets.
The full calendar year forecast for 2015 remains a small profit and continues the improvement in the combined ratio year on year, reflecting the continued progress in turnaround in what is the final stage of transformation for ERS.
ERS released its forecast for the 2013 YOA which is currently forecast to close with a profit of 0.5% of capacity. This builds on the closure of the 2012 YOA with a profit of 0.3% of capacity, being the first reported profit since 2007. The 2014 YOA forecast loss remains unchanged from Q1 with a range of -7.8% to +2.2% of capacity at this relatively early stage of development.
Chief Financial Officer Katie Wade said: “This performance is set against the backdrop of continued tough market conditions, and continued distractions expected from such an ambitious transformation. The transformation is currently on track with the IT delivery completed during the half year. The final office moves and embedding during the second half of 2015 will complete the programme”
CEO Ian Parker added: “ERS is coming to the end of our transformation programme, which has involved making some changes that were absolutely vital for us as a “motor only broker only insurer”, and came at a cost. This is reflected in our results. We have achieved what we have though because of the strength of our relationships with brokers and have retained our GWP at last year’s level. The emergence of strengthening rates is long overdue.
“I know the Board shares my confidence that we have now built the foundations from where we can really start to grow and deliver decent returns to all capital providers.”
ENDS
For more information please contact:
Liz McMahon
ERS PR & Communications Manager
0770 4542318
liz.mcmahon@ers.com
Notes to Editors:
About ERS
ERS has been providing insurance products for more than 60 years and provides insurance to more than 500,000 policyholders through Lloyd’s syndicate 218. ERS offers a diverse range of products, including private car, classic car, van, motorcycle, taxi, minibus, fleet, haulage, agricultural vehicle and motor breakdown.
