ERS, the specialist motor insurer, has announced profits of £32.8m and a Combined Operating Ratio of 91.9% (99.7% in 2019) following a year of underwriting discipline, the realisation of technology investments and a reduction in claims frequency due to changes in driving behaviour caused by Covid-19.
The result is a record profit since the firm was bought by Aquiline in 2013.
Covid-19 materially affected premiums as demand in Private Car, Minibus, Taxi and Fleet products slowed following reduced trading in some sectors and as a result of policy holders changing cover levels or laying up vehicles. However, those adverse pressures were offset by significant growth in demand for some of the firms most specialist products including Agriculture, Supercar and Courier as brokers sought to place business with an A+ rated insurer following recent market instability. The year ended with a GWP of £329m (£360m in 2019).
Covid support and underwriting discipline
Early in the pandemic, it became clear that brokers and their policy holders required insurers to be supportive and more flexible than ever. To help, alongside other interventions, ERS made significant changes to their wording, allowing policy holders to make voluntary deliveries throughout the pandemic; accidental damage excesses were waived for keyworkers; and courtesy cars were provided for free to ensure they can get to work. ERS’ underwriting flexibility ensured brokers were able to retain policies and customers, helping enhance broker’s reputation when their customers required support most.
Digital investments improving broker experience
The result was also driven by the realisation of recent technical investments built on ERS’ legacy free platform. 90% of Commercial motor new business is now digital following the launch of new eTrade features which enable brokers to self-serve the full policy lifecycle online. These features have helped brokers be more efficient and save time throughout the pandemic as policy holders required quick responses to market changes. Additionally, the continued roll out of insurer hosted pricing has allowed ERS to react in real-time to market needs, ensuring their most competitive pricing is available quickly.
ERS Group CEO, Peter Bilsby commented “Whilst it would be easy to point to a reduction in claims frequency throughout 2020 as a key input to the result, the digitalisation of Commercial products has been fundamental.
By creating a full lifecycle online broker trading platform, we have been able to cope with changes in the market and can scale better than ever before – the pandemic alone saw demand for our Commercial products increase by over 60%, all of which was traded online. Technology investments will be a key pillar of our proposition through 2021 as we look to continue to differentiate by digitalising some of our most specialist products, making it easier than ever for brokers to trade with us.
We are beginning to build a solid track record of results and I have every confidence we will
continue to grow through disciplined underwriting and expert judgement aligned to our strategy. The positive performance of the motor business is critical as it provides us with stability as we enter an exceptionally exciting and pivotal period, expanding our capabilities into new Commercial and Specialty lines”.
