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Ecclesiastical pre-tax profit falls to £15.4 million

Ecclesiastical pre-tax profit falls to £15.4 million | Insurance Business

Ecclesiastical pre-tax profit falls to £15.4 million

Ecclesiastical Insurance Office Plc has released its full-year financial results for 2018, and it’s a mix of wins and losses.

From a pre-tax profit of £82.2 million in 2017, the specialist financial services group saw last year’s figure dive to £15.4 million. Much of the blame was placed on the effect of short-term stock market fluctuations on Ecclesiastical’s investment portfolio.

According to the Gloucester-headquartered firm, the downturn in equity markets in 2018 resulted in its lower investment returns of £4 million – a plunge from £72.3 million previously. This negated Ecclesiastical’s underwriting profit, which improved from 2017’s £27.1 million to £29.2 million.

Broken down into its general insurance markets, Ecclesiastical reported an underwriting profit of £29.4 million – a decline from £32.7 million – in the UK and Ireland; AU$2.5 million in Australia where the number more than doubled year-on-year from AU$1.2 million; and an underwriting loss of CA$4.5 million in Canada, which saw a narrowing from the CA$12.1 million loss suffered in 2017.       

Meanwhile good news came from the group’s investment management business EdenTree, with higher net inflows to funds of £181 million compared to 2017’s £121 million. The weakness in global equity market returns, however, broadly offset the amount.

As for Ecclesiastical’s life insurance unit, which is closed to new business, it posted a £1.5 million profit in 2018 after recording £0.4 million in the previous year. The broking and advisory business, on the other hand, saw a slight decrease in profit before tax. The overall figure stood at £2 million, from £2.3 million.

The broking and advisory operations include South Essex Insurance Brokers Limited, whose pre-tax profit dipped from £2.5 million to £2.4 million in 2018. Meanwhile both Ecclesiastical Financial Advisory Services Limited and Ansvar Risk Management Services reported losses.

But perhaps the most noteworthy of Ecclesiastical’s 2018 numbers were its donations to charity. Described as the fourth largest corporate donor in the UK, the company donated £1.8 million to the causes it directly supports as well as £17 million to its charitable owner Allchurches Trust.