Are you a glass half full or a glass half empty kind of person?
Where you stand on being a pessimist or an optimist might determine how you view Covéa Insurance plc’s results, revealed this morning. On the positive side, the company saw its GWP increase from £738.5 million to £765.1 million year on year; but on the negative side, it suffered a slump in profit after tax, down from £24.1 million to £1.5 million and a fall in underwriting profit from £12.4 million to £1.8 million.
Overall, the company saw its combined operating ratio rise from 97.5% to 99.7%. Breaking down its main product lines highlights its contrasting fortunes – personal lines motor saw GWP at £389.1 million, with a COR of 102.8%; personal lines home GWP reached £117.4 million with COR at 106.1%; but protection achieved a 99.5% COR with GWP of £51.1 million; and commercial lines was the stand-out performer with a COR at 89.7% and GWP at £207.5 million.
In its announcement the company noted that the personal lines aspect of the business had suffered from an “extremely competitive market” and “strong inflationary claims trends.”
“Those trends were the main contributor to the overall reduction in underwriting profitability, with both the frequency of theft claims and the average cost of vehicle repairs increasing significantly,” it stated. “Home profitability was also impacted by a higher number of large fire claims and adverse weather experience – including the ‘Beast from the East’ freeze event and an increase in subsidence claims following the exceptionally dry summer.”
All of this led chief executive James Reader to describe the year as “challenging” for personal lines amid a soft market.
“Looking beyond our financial performance, we’ve continued to deliver market-leading levels of service to our customers and broker partners and have commenced a major programme of investment in new digital technologies, to ensure that we continue to meet their changing expectations,” he said. “We’ve also made good progress in creating a more inclusive workplace, and in ensuring Covéa Insurance remains a great place to work for all our people.
“We are very ambitious as an organisation and I remain confident that we are well placed to deliver on those ambitions.”