Full-year figures show that esure (ESUR) went from strength to strength in 2017, especially impressive given the daunting comparators from 2016, and a tight competitive environment in the motor insurance sector. Nevertheless, gross premiums written rose by a quarter, with in-force policies up by 9 per cent at 2.37m, well on the way to achieving a target of 3m policies by 2020.
Key metrics were mixed, with the group’s combined ratio (of claims as a percentage of premium income) improving from 98.8 per cent to 96.7 per cent. All this was achieved while maintaining solvency coverage at a comfortable 155 per cent. Most of the premium income comes from writing motor insurance, but £85.9m came from home insurance policies. This was down 5.9 per cent from a year earlier, as esure maintained strict underwriting discipline in a market where premium rates were softening. Despite the fall-away, esure increased rates during the year to meet claims inflation. But this had an impact on competitiveness and the ability to retain customers, so the combined operating ratio remained lossmaking at 102.8 per cent.
Analysts at Numis are forecasting pre-tax profits for the year to December 2018 of £115.6m and EPS of 22.4p (from £98.6m and 19.2p in 2017).
| ESURE (ESUR) | ||||
| ORD PRICE: | 223.4p | MARKET VALUE: | £ 934m | |
| TOUCH: | 223.4-224p | 12-MONTH HIGH: | 307p | LOW: 211p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 71p | COMBINED RATIO: | 96.7% | |
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
| 2013 | 526 | 118 | 45.5 | 15.8 |
| 2014 | 518 | 103 | 42.9 | 16.8 |
| 2015 (restated) | 550 | 61 | 36.3 | 11.5 |
| 2016 | 655 | 72.7 | 55.7 | 13.5 |
| 2017 | 820 | 98.6 | 61.5 | 13.5* |
| % change | +25 | +36 | +10 | - |
| Ex-div: | 12 Apr | |||
| Payment: | 25 May | |||
| *Includes 1.2p a share special dividend | ||||
