We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Esure | LSE:ESUR | London | Ordinary Share | GB00B8KJH563 | ORD 1/12P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 279.60 | 279.40 | 279.80 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMESUR
RNS Number : 9574M
esure Group plc
03 August 2017
03 August 2017
esure Group plc interim results for the six months ended 30 June 2017
An excellent first half with growth in premiums, policies and profits
Highlights
-- Gross written premiums up 22.8% to GBP393.3m (1H 2016: GBP320.4m) -- In-force policies up 8.8% to 2.258 million (1H 2016: 2.076 million) -- Profit before tax from continuing operations up 44.6% to GBP45.1m (1H 2016: GBP31.2m) -- Combined operating ratio improved 2.6ppts to 96.6% (1H 2016: 99.2%)
-- Interim dividend of 4.1p per share (1H 2016: 3.0p per share) reflects a payout ratio of 70% of earnings per share, inclusive of a 20% special dividend
-- Solvency coverage(1) at 153% (FY 2016: 152%)
Sir Peter Wood, Chairman, said: "esure has performed very well in the first half of the year as the Management team continues to drive the Group's profitable growth strategy. Our solid capital position has led the Board to declare an interim dividend of 4.1 pence per share, which includes a special dividend, at the same time as allowing esure to retain sufficient capital and flexibility to continue to pursue our profitable growth ambitions."
Stuart Vann, Chief Executive Officer, said: "I am delighted with our performance in the first half of 2017. We have delivered strong growth in premiums, policies and profits as the success and momentum of our footprint expansion programme and disciplined underwriting continues to drive the business forward. In Motor, we are growing across all our customer segments, demonstrating the value and service proposition we offer to customers.
"I am really pleased with the outcome of our reinsurance renewal on 1 July which is testament to our focused underwriting approach and strong relationships with our reinsurance panel. As indicated earlier in the year, we have increased prices in the first half of the year which mitigate this increased cost to the business, whilst continuing to grow.
"Overall, it has been a great start to 2017, and we are firmly on track to deliver results at the positive end of our 2017 guidance."
For further information:
Chris Wensley Chris Barrie/Grant Head of Investor Relations Ringshaw & Corporate Strategy Citigate Dewe Rogerson t: 01737 641324 t: 0207 638 9571 e: investor.relations@esuregroup.com e: esure@citigatedr.co.uk
Note
1. Solvency coverage is the Group's Own Funds divided by its Solvency Capital Requirement. The capital coverage for 1H 2017 is estimated and unaudited. The Group's coverage ratio includes adjustments, which in aggregate, if an adjustment was not made, would increase the Group's interim coverage ratio compared to the position as at the year end. These primarily relate to timing differences in respect of the Group's interim dividend and the loss absorbing capacity of deferred taxes. Were the Group not to adjust for these seasonal factors, the coverage ratio would be 157%.
About esure Group plc
esure Group plc is an efficient, customer-focused personal lines insurer, founded in 2000 by Chairman, Sir Peter Wood, Britain's foremost general insurance entrepreneur. The Group is one of the UK's leading providers of Motor and Home insurance products through the esure and Sheilas' Wheels brands.
Cautionary statement
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and assumptions and are subject to a number of known and unknown risks and uncertainties that may cause actual events or results to differ materially from any expected future events or results expressed or implied in these forward-looking statements. Persons receiving this announcement should not place undue reliance on forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standard, the Group does not undertake to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Disclaimer
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016.
The esure Group plc LEI number is 213800KOI3F5LM54PT80.
Review of 1H 2017
Group
Hot Features
Premium
1H 1H
2017 2016
Gross written premiums (GBPm) 393.3 320.4
In-force policies (millions) 2.258 2.076
Trading profit from continuing
operations (GBPm) 51.5 37.1
Profit before tax from continuing
operations (GBPm) 45.1 31.2
Earnings per share from continuing
operations (pence) 8.7 6.1
Dividend per share (pence) 4.1 3.0
Combined operating ratio (%) 96.6 99.2
Loss ratio (%) 71.2 74.9
Expense ratio (%) 25.4 24.3
Investment return - gross (%) 0.9 1.0
Solvency coverage (%) 153 126(1)
(1) The 1H 2016 solvency coverage has not been adjusted.
Motor
1H 1H
2017 2016
Gross written premiums (GBPm) 351.3 275.7
In-force policies (millions) 1.740 1.495
Combined operating ratio (%) 95.3 97.9
Loss ratio 72.6 76.4
Expense ratio 22.7 21.5
Trading profit (GBPm) 48.1 34.3
Underwriting 12.8 4.5
Non-underwritten additional services 30.0 23.8
Investments 5.3 6.0
Gross written premiums increased 27.4% to GBP351.3m (1H 2016: GBP275.7m) through a combination of positive rating actions and in-force policy growth. In-force policies increased by 16.4% to 1.740 million (1H 2016: 1.495 million) as the Group's core and footprint expansion segments all grew in the first half of the year.
Trading profit of GBP48.1m is 40.2% higher than 1H 2016 (GBP34.3m) through an improvement in the underwriting and non-underwritten additional services revenues performance. The underwriting result improved as the Group's positive rating actions earn through ahead of claims inflation, and this is reflected in the improvement in the current year net loss ratio of 76.6% (1H 2016: 82.2%). Favourable development of prior accident year reserves of GBP11.0m equated to 4.0% of net earned premiums (1H 2016: GBP13.0m; 5.8%).
1H 1H
2017 2016
Reported net loss ratio (%) 72.6 76.4
Prior year reserve releases (%) 4.0 5.8
Current accident year net loss
ratio (%) 76.6 82.2
Non-underwritten additional services revenues increased 26.1% to GBP30.0m (1H 2016: GBP23.8m) largely driven by higher instalment income, where higher average written premiums year-on-year and growth in overall policy count in the first half of 2017 increased income.
Home
1H 1H
2017 2016
Gross written premiums (GBPm) 42.0 44.7
In-force policies (thousands) 517 581
Combined operating ratio (%) 104.9 105.5
Loss ratio 61.6 66.8
Expense ratio 43.3 38.7
Trading profit (GBPm) 3.4 2.8
Underwriting (2.0) (2.3)
Non-underwritten additional services 4.8 4.3
Investments 0.6 0.8
Gross written premiums reduced 6.0% to GBP42.0m (1H 2016: GBP44.7m) as a result of disciplined underwriting in challenging market conditions. In-force policies are 11.0% lower at 517,000 (1H 2016: 581,000) as the Group increased prices ahead of the wider market as it looked to mitigate against rising claims inflation.
Trading profit is 21.4% higher at GBP3.4m (1H 2016: GBP2.8m) largely driven by an improvement in the non-underwritten additional services revenues.
The underwriting loss of GBP2.0m reflects the soft rating environment earning through in combination with claims inflation, in particular relating to escape of water claims as noted by the wider market. The first half performance has benefited from a benign period of weather compared to the first half of 2016 when the Group incurred GBP5.0m of adverse weather claims. Favourable development of prior accident year reserves of GBP3.7m equated to 9.0% of net earned premiums (1H 2016: GBP7.5m; 17.9%).
1H 1H
2017 2016
Reported net loss ratio (%) 61.6 66.8
Prior year reserve releases (%) 9.0 17.9
Current accident year net loss
ratio (%) 70.6 84.7
The expense ratio of 43.3% is 4.6ppts higher than the first half of 2016 primarily due to a full period cost of the Flood Re Levy that was introduced on 1 April 2016. Non-underwritten additional services revenues increased 11.6% to GBP4.8m due to an improvement in the performance of non-underwritten additional insurance products and higher instalment income.
Additional services revenues
1H 1H
2017 2016
GBPm GBPm
Non-underwritten additional insurance
products 5.6 4.8
Policy administration fees and
other income 10.5 9.6
Claims income 3.8 3.0
Instalment income 21.8 17.8
Non-underwritten additional services 41.7 35.2
Underwritten additional insurance
products 17.2 16.3
Total income from additional services 58.9 51.5
Motor 53.5 46.6
Home 5.4 4.9
Non-underwritten additional services
trading profit 34.8 28.1
Motor 30.0 23.8
Home 4.8 4.3
ASR per IFP - Motor 63.8 63.9
ASR per IFP - Home 19.4 18.3
Total income from additional services increased 14.4% to GBP58.9m (1H 2016: GBP51.5m) driven by a strong performance across all income lines. Non-underwritten additional services trading profit increased 23.8% to GBP34.8m (1H 2016: GBP28.1m) ahead of the Group's in-force policy growth.
Investments
1H 1H
2017 2016
GBPm GBPm
Investment income 6.4 7.1
Net gains on investments 1.4 0.5
Investment charges (2.1) (1.5)
Net investment return 5.7 6.1
Other income 0.2 0.7
Total investment return 5.9 6.8
Investment return - Gross (%) 0.9 1.0
Investment return - Net (%) 0.7 0.8
The Group achieved a gross investment return of 0.9% (1H 2016: 1.0%) and a net investment return of 0.7% (1H 2016: 0.8%).
The net investment return was slightly lower year-on-year at GBP5.7m (1H 2016: GBP6.1m) with performance tailing off towards the end of the period following a marked steepening in the UK yield curve. Net gains on investments include a one-off realised gain of GBP2.0m as the Group partially disposed of its long dated Gilt to ensure an appropriate matching between assets and liabilities under Solvency II. This is not expected to repeat in the second half of 2017.
Other income was lower at GBP0.2m (1H 2016: GBP0.7m).
Trading profit
1H 1H
2017 2016
GBPm GBPm
Trading profit from continuing
operations 51.5 37.1
Motor 48.1 34.3
Home 3.4 2.8
Trading profit from discontinued
operations - 13.2
Gocompare.com - 13.2
Trading profit from continuing operations, being earnings before interest, tax, non-trading expenses and amortisation of acquired intangible assets, is management's measure of the overall profitability of the Group's operating activities. The Group's reportable segments are Motor and Home and these delivered a trading profit of GBP51.5m (1H 2016: GBP37.1m).
The Group generated a trading profit from discontinued operations (Gocompare.com) of GBPnil (1H 2016: GBP13.2m). Gocompare.com was demerged from the Group on 3 November 2016.
Reconciliation of trading profit from continuing operations to profit before tax from continuing operations
1H 1H
2017 2016
GBPm GBPm
Trading profit from continuing
operations 51.5 37.1
Non-trading costs (1.0) (0.4)
Finance costs (4.3) (4.3)
Amortisation of acquired intangible
assets (1.1) (1.2)
Profit before tax from continuing
operations 45.1 31.2
The Group incurred GBP4.3m in finance costs (1H 2016: GBP4.3m) relating to the GBP125.0m of 6.75% ten year tier two Subordinated Notes issued on 19 December 2014 ("the Notes").
Profit after tax
Profit after tax from continuing operations
The Group's profit after tax from continuing operations increased 43.1% to GBP36.5m (1H 2016: GBP25.5m) largely driven by an improvement in the underwriting and non-underwritten additional service revenues performance.
Profit after tax from discontinued operations
The Group generated a profit after tax from discontinued operations (Gocompare.com) of GBPnil (1H 2016: GBP5.2m). Gocompare.com was demerged from the Group on 3 November 2016.
Earnings per share
Earnings per share
Earnings per share increased 17.6% to 8.7 pence (1H 2016: 7.4 pence).
Earnings per share from continuing operations
Earnings per share from continuing operations increased by 42.6% to 8.7 pence (1H 2016: 6.1 pence) in line with the increase in profit after tax from continuing operations.
Dividend per share
An interim dividend of 4.1 pence per share (1H 2016: 3.0 pence per share) has been declared and approved by the Board. The interim dividend is comprised of a base dividend of 2.9 pence per share and a special dividend of 1.2 pence per share. The dividend has been set with reference to the Group's profit after tax and allows for the approximate proportion of one-third (interim dividend) and two-thirds (final dividend), respectively.
The ex-dividend date is 31 August 2017, the record date is 1 September 2017 and the payment date is 13 October 2017. These dates are in respect of both the base and special interim dividend.
Cash flow
1H 1H
2017 2016
GBPm GBPm
Profit after tax 36.5 30.7
Net cash generated from:
Operating activities 61.3 36.8
Investing activities (3.4) (5.2)
Financing activities (48.0) (34.6)
Net increase / (decrease) in cash
and cash equivalents 9.9 (3.0)
Cash and cash equivalents at the
beginning of the year 25.5 31.9
Cash and cash equivalents at the
end of the period 35.4 28.9
The Group's cash and cash equivalents at the end of the period are GBP35.4m (1H 2016: GBP28.9m).
Operating activities were a net inflow of GBP61.3m (1H 2016: GBP36.8m) largely driven by the Group's strong premium growth in the first half of the year.
Investing activities were a net outflow of GBP3.4m (1H 2016: GBP5.2m) and reflects the Group's investment in property, plant, equipment and software.
Financing activities were a net outflow of GBP48.0m (1H 2016: GBP34.6m) and includes the Group's 2016 final dividend that was paid in May 2017 of GBP43.9m (1H 2016: GBP30.4m).
The Group's cash flow statement can be found on page 14.
Investments
The Group deploys a conservative investment strategy, with the primary objectives of capital preservation and maintaining liquidity. Through better alignment of the investment and liability durations, the Group is able to deliver appropriate returns while minimising earnings and capital volatility.
Strategic investment allocations
The Group's investment portfolio is in the process of transitioning towards the following strategic asset allocations and target returns. The Group's target allocations and target returns are outlined below:
Investment categories Target allocations Gross target
returns
Cash & Liquidity 5% 0.1%
Claims backed 65% 1.0%
Surplus 30% 3.0%
As at the 30 June 2017 the Group held the following investments:
1H 2017 FY 2016
% GBPm % GBPm
Total 100 912.7 100 862.9
Cash & Liquidity 7% 65.2 5% 45.5
Liquidity funds 29.8 20.0
Cash 35.4 25.5
Claims backed 62% 563.7 64% 551.8
Liquidity funds 79.7 46.2
Fixed income 484.0 505.6
Surplus 31% 283.8 31% 265.6
Liquidity funds 136.2 143.0
Equity 52.7 42.5
Fixed income 94.9 80.1
The Group's total assets under management are 5.8% higher at GBP912.7m (FY 2016: GBP862.9m including derivative financial liabilities) reflecting the Group's strong premium growth in the period.
The Cash & Liquidity portfolio is accessible cash for operational activities and is inclusive of a buffer for adverse events. The allocation of 7% is in line with the Board approved liquidity risk appetite.
The Claims backed portfolio is constructed with reference to the expected future cost of the Group's technical liabilities, as defined under Solvency II. The Group continues to designate newly acquired assets as available-for-sale ("AFS") to minimise the impact of interest rate changes on earnings. As at 30 June 2017 the Group has designated GBP297.2m as AFS and GBP266.5m as fair value through profit and loss.
The Surplus portfolio seeks to deliver returns while investing in a manner that reflects the Group's risk appetite, in particular with reference to its solvency capital. The strategic asset allocation review continues and the Group expects to allocate surplus liquidity funds on a prudent basis in due course. The remaining assets are invested across a mixture of fixed income and equities.
The Group's total investment duration was 2.4 years (FY 2016: 2.6 years) and the Group continues to take a proactive approach to match its asset and liability durations under Solvency II.
Fixed income
1H FY
2017 2016
GBPm GBPm
Total fixed income 579 586
Corporate bonds 264 281
Covered / residential mortgage
backed securities 38 15
Government bonds 191 206
Floating rate notes 86 84
Fixed income credit risk quality
1H FY
2017 2016
% %
AAA 14 18
AA 33 35
A 18 22
BBB 25 16
Below BBB or not rated 10 9
The credit risk quality of the fixed income portfolio remains strong with 65% held in assets rated 'A' or above.
Reserving
The Group holds claims reserves, to cover the future cost of settling claims that have been incurred but not settled at the balance sheet date, whether already known to the Group or not yet reported, net of associated reinsurance recoveries.
For known periodic payment orders ("PPOs") and potential PPO awards, indexed cash flow projections are carried out in order to estimate an ultimate cost on a gross and net of reinsurance basis. The Group currently has 10 PPOs. The cash flow projections were undertaken on a discounted basis.
Due to the inherent uncertainties in reserving, the Group adopts a prudent approach to reserving through reserving in excess of the actuarial best estimate. Over time the inherent uncertainties in the actuarial best estimate reduce and the Group releases the margin above the best estimate. The Group's current reserve margin is comfortably in excess of its actuarial best estimate.
On 27 February 2017, the Lord Chancellor changed the Ogden discount rate from plus 2.5% to minus 0.75%, effective 20 March 2017. The impact of this change on the Group's 2017 performance was not material.
The Group benefited from strong favourable development of prior accident year reserves, with total prior year releases of GBP14.7m in 1H 2017 (1H 2016: GBP20.5m). The favourable development represents 4.6% of net earned premium (1H 2016: 7.8%).
Reinsurance
The Group purchases reinsurance as a risk transfer mechanism to mitigate risks that are outside the Group's appetite for individual claim or event exposure and to reduce the volatility caused by large individual and accumulation losses. By doing so, the Group reduces the impact that an event can have on its capital position and its underwriting results in both Motor and Home.
Currently, the Group has in place excess of loss reinsurance programmes for its Motor and Home underwriting activities. The purpose of these programmes is to provide cover for both individual large losses, for Motor and Home, and accumulation losses arising from natural and other catastrophe events for Home. Motor and Home reinsurance treaties are in place covering all years in which the Group has underwritten policies in each line of business.
The Group's Motor reinsurance treaty was renewed on 1 July 2017:
Layer Placement GBP1m x GBP1m 85% Unlimited x GBP2m 100%
The like-for-like cost increase of the programme was 33%, equating to an increase of GBP10 per vehicle, as a consequence of the change in the Ogden discount rate in February 2017 from 2.5% to minus 0.75%. The increase in reinsurance costs compares favourably to market estimates and reflects the Group's low risk approach to underwriting, low large loss propensity and strong, long term relationships with its reinsurer panel. The Group has successfully implemented price increases across its Motor portfolio in the first half of the year to help mitigate against the increased cost of reinsurance.
The Home treaty was renewed on 1 July 2017 with no material changes to the programme.
The Group's reinsurance programmes are reviewed on an annual basis and capital modelling is used to identify the most appropriate structure and risk retention profile, taking into account the Group's business objective of minimising volatility and the prevailing cost and the availability of reinsurance in the market.
The Group has no quota share reinsurance or co-insurance arrangements in place.
Capital
The Group seeks to manage its capital in order to maintain a level of capitalisation and solvency to ensure that regulatory requirements are met with an appropriate buffer and that there is sufficient capital available to fund profitable growth opportunities.
The solvency capital requirement ("SCR") is the level of capital the Group is required to hold to meet its obligations if a 1 in 200 year event were to occur in the next 12 months. The Group's normal operating range of coverage of its SCR is 130-150%. The capital surplus above the SCR provides an appropriate level of capital coverage and should enable the Group to continue to meet its regulatory capital requirements. The Group adopts the standard formula to calculate its capital requirements under Solvency II.
The Group's capital position, after allowing for the interim dividend, is outlined below:
1H FY
2017 2016
GBPm GBPm
Own Funds 405 355
Tier 1 279 238
Tier 2 126 117
Solvency Capital Requirement 265 233
Coverage ratio 153% 152%
The figures quoted for 1H 2017 are estimated and unaudited.
As at 30 June 2017, the coverage ratio of the Group's SCR was 153% (FY 2016: 152%). The Group's coverage ratio includes adjustments, which in aggregate, if an adjustment was not made, would increase the Group's interim coverage ratio compared to the position as at the year end. These primarily relate to timing differences in respect of the Group's interim dividend and the loss absorbing capacity of deferred taxes. Were the Group not to adjust for these factors, the coverage ratio would be 157%.
Own Funds comprise Tier 1 and Tier 2 qualifying capital. The Notes meet the qualifying criteria of a Tier 2 capital instrument and qualify up to a maximum of 50% of the SCR. The quality of the Group's capital remains strong with 69% in Tier 1 and 31% in Tier 2.
Solvency Capital Requirement
The Group's SCR allocation by risk type, based upon the undiversified capital requirement, can be seen below:
1H FY
2017 2016
Underwriting risk 71% 72%
Market risk 19% 18%
Operational risk 7% 8%
Credit risk 3% 2%
The main risk driver is underwriting, consisting of premium, reserve and catastrophe risk, reflecting the capital requirements of the core business activities for the Group.
Sensitivities
The Group's capital structure is positioned to minimise the impact that adverse capital events have on its ability to meet its solvency capital requirements, were they to occur. The adverse capital events below are outlined to demonstrate the Group's capital resilience to such events.
Impact
on coverage*
Motor loss ratio 5ppts worse (9)ppts
Yield curve 50bps lower (1)ppts
Equities fall 25% (2)ppts
Credit spreads widen 50bps (2)ppts
1987 Hurricane (3)ppts
* Capital coverage movements are stated after earnings, tax and dividend impact.
Dividend Policy
The Group's dividend policy is to target a base dividend of 50% of profit after tax and enhance the base dividend with a further special dividend, if the Group has sufficient capital and distributable reserves, after allowing for an appropriate level of capital coverage of the Group's SCR and future growth opportunities. The Board remains committed to returning excess capital to shareholders where it does not believe it can utilise retained capital for further profitable growth.
The interim dividend will be paid in October of the relevant financial year and the final dividend in May of the following financial year, in the approximate proportions of one-third and two-thirds respectively.
Segmental Reporting
In 2017, the Group changed its reportable segments to Motor and Home to reflect the lines of business it underwrites and the contribution they deliver to the Group's performance. In 2016, the Group's reportable segments were: Motor underwriting; Home underwriting; Non-underwritten additional services; Investments; and prior to the demerger of Gocompare.com, Price Comparison.
Outlook
The Group's 2017 guidance provided in March, assuming stable market conditions and normal weather, was: growth in premiums and in-force policies at 15-20% and 5-10%, respectively; the combined operating ratio to be in the region of 96-98%; and non-underwritten additional services revenues to grow ahead of in-force policies in line with the trend seen in the second half of 2016. The Group now expects to deliver results at the positive end of this guidance.
The Group's ambition is to grow to 3 million in-force policies by 2020.
esure Group plc
Condensed consolidated statement of
comprehensive income
Reviewed Reviewed Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Notes GBPm GBPm GBPm
Gross written premiums 393.3 320.4 655.0
------------------ ------------------ ---------------
Gross earned premiums 341.7 284.6 598.0
Earned premiums, ceded
to reinsurers (25.0) (20.2) (43.1)
------------------ ------------------ ---------------
Earned premiums,
net of reinsurance 316.7 264.4 554.9
Investment return and
instalment interest 27.7 24.6 55.7
Other income 19.9 17.4 36.9
------------------ ------------------ ---------------
Total income 364.3 306.4 647.5
Claims incurred and claims
handling expenses (272.3) (221.0) (509.5)
Claims incurred recoverable
from reinsurers 36.0 11.7 74.4
------------------ ------------------ ---------------
Claims incurred,
net of reinsurance 11 (236.3) (209.3) (435.1)
Insurance expenses (69.6) (52.9) (113.3)
Other operating expenses (9.0) (8.7) (17.7)
------------------ ------------------ ---------------
Total expenses (314.9) (270.9) (566.1)
Finance costs (4.3) (4.3) (8.7)
------------------ ------------------ ---------------
Profit before tax 45.1 31.2 72.7
Taxation expense 7 (8.6) (5.7) (13.2)
------------------ ------------------ ---------------
Profit from continuing
operations, net of tax 36.5 25.5 59.5
Profit from discontinued
operations, net of tax - 5.2 209.7
------------------ ------------------ ---------------
Profit attributable to the
owners of the parent 36.5 30.7 269.2
------------------ ------------------ ---------------
Other comprehensive
income
Items that will not be reclassified
to profit or loss:
Revaluation of land
and buildings - - 0.3
Tax relating to items that
will not be reclassified - - 0.0
------------------ ------------------ ---------------
- - 0.3
---------------------- ------------------ ---------------
Items that are or may be reclassified
to profit or loss:
Available-for-sale financial
assets - change in fair value 0.5 4.6 1.9
Tax relating to items
that are reclassified 0.1 (0.7) (0.3)
------------------ ------------------ ---------------
0.6 3.9 1.6
------------------ ------------------ ---------------
Total comprehensive income
for the period attributable
to owners of the parent 37.1 34.6 271.1
------------------ ------------------ ---------------
Earnings per share
(pence per share)
- ordinary shares,
basic 6 8.7 7.4 64.6
- ordinary shares,
diluted 6 8.6 7.4 64.3
Earnings per share from
continuing operations
(pence per share)
- ordinary shares,
basic 6 8.7 6.1 14.3
- ordinary shares,
diluted 6 8.6 6.1 14.2
The notes on pages 15 to 31 form part
of these financial statements.
esure Group plc
Condensed consolidated statement
of financial position
Reviewed Reviewed Audited
As at As at As at
30 June 30 June 31 Dec
2017 2016 2016
Notes GBPm GBPm GBPm
Assets
Goodwill and intangible
assets 8 13.6 176.6 12.7
Deferred acquisition
costs 42.5 35.1 37.8
Property, plant
and equipment 9 30.3 35.2 32.5
Financial investments 10 878.2 760.8 839.0
Reinsurance
assets 11 322.5 230.0 291.7
Insurance and other
receivables 277.5 248.0 245.6
Cash and cash equivalents 10 35.4 28.9 25.5
Total assets 1,600.0 1,514.6 1,484.8
Equity and
liabilities
Share capital 0.3 0.3 0.3
Share premium account 45.5 44.0 45.4
Capital redemption
reserve 44.9 44.9 44.9
Other reserves 3.5 4.9 2.9
Retained earnings 173.6 252.4 178.0
Total equity 267.8 346.5 271.5
Liabilities
Insurance contract
liabilities 11 1,098.8 914.7 1,002.3
Borrowings 10 122.9 122.7 122.8
Insurance and other
payables 98.7 100.7 77.3
Deferred tax
liabilities 1.6 10.2 3.2
Derivative financial
liabilities 10 0.9 11.1 1.6
Current tax
liabilities 9.3 8.7 6.1
Total liabilities 1,332.2 1,168.1 1,213.3
Total equity and
liabilities 1,600.0 1,514.6 1,484.8
The notes on pages 15 to 31 form part
of these financial statements.
Registered number:
07064312
esure Group plc
Condensed consolidated statement of
changes in equity
Share Capital
Share premium redemption Other Retained Total
capital account reserve reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm GBPm
6 months ended 30 June
2017
At 1 January 2017 0.3 45.4 44.9 2.9 178.0 271.5
Profit for the year - - - - 36.5 36.5
Other comprehensive
income - - - 0.6 - 0.6
---------- ---------- ---------------- ---------------- ------------ --------
Total comprehensive
income - - - 0.6 36.5 37.1
Transactions with owners
Issue of share capital 0.0 0.1 - - - 0.1
Share-based payments - - - - 2.3 2.3
Deferred tax on
share-based payments - - - - 0.7 0.7
Dividends 5 - - - - (43.9) (43.9)
---------- ---------- ---------------- ---------------- ------------ --------
Total transactions
with owners 0.0 0.1 - - (40.9) (40.8)
---------- ---------- ---------------- ---------------- ------------
At 30 June 2017 0.3 45.5 44.9 3.5 173.6 267.8
---------- ---------- ---------------- ---------------- ------------ --------
6 months ended 30 June
2016
At 1 January 2016 0.3 44.0 44.9 1.0 251.1 341.3
Profit for the year - - - - 30.7 30.7
Other comprehensive
income - - - 3.9 - 3.9
---------- ---------- ---------------- ----------------
Total comprehensive
income - - - 3.9 30.7 34.6
Transactions with owners
Share-based payments - - - - 0.9 0.9
Deferred tax on
share-based payments - - - - 0.1 0.1
Dividends 5 - - - - (30.4) (30.4)
---------- ---------- ---------------- ---------------- ------------ --------
Total transactions
with owners - - - - (29.4) (29.4)
---------- ---------- ---------------- ---------------- ------------ --------
At 30 June 2016 0.3 44.0 44.9 4.9 252.4 346.5
---------- ---------- ---------------- ---------------- ------------ --------
Year ended 31 December
2016
At 1 January 2016 0.3 44.0 44.9 1.0 251.1 341.3
Profit for the year - - - - 269.2 269.2
Other comprehensive
income - - - 1.9 - 1.9
---------- ---------- ---------------- ---------------- ------------ --------
Total comprehensive
income - - - 1.9 269.2 271.1
Transactions with owners
Issue of share capital 0.0 1.4 - - - 1.4
Share-based payments - - - - 2.4 2.4
Deferred tax on
share-based payments - - - - (0.0) (0.0)
Demerger of
Gocompare.com - - - - (301.8) (301.8)
Dividends 5 - - - - (42.9) (42.9)
---------- ---------- ---------------- ---------------- ------------ --------
Total transactions
with owners 0.0 1.4 - - (342.3) (340.9)
At 31 December 2016 0.3 45.4 44.9 2.9 178.0 271.5
The notes on pages 15 to 31 form part
of these financial statements.
esure Group plc
Condensed consolidated statement
of cash flows
Reviewed Reviewed Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Cash flows from operating Notes GBPm GBPm GBPm
activities
Profit after tax for
the period 36.5 30.7 269.2
Adjustments to reconcile profit
after tax to net cash flows:
- Finance costs 4.3 4.3 8.7
- Depreciation and
revaluation
of property, plant
and equipment
9 2.4 1.0 3.8
Amortisation of
intangible
- assets 8 2.3 8.7 15.2
Share scheme
- charges 2.3 0.9 2.4
Non-cash gain on
demerger
- of Gocompare.com - - (213.6)
- Taxation expense 8.6 7.0 16.0
Total investment
- return (7.8) (8.0) (20.7)
Instalment
- interest (21.8) (17.8) (37.7)
Loss on the disposal of
property,
- plant and equipment - - 0.5
---------------- ---------------- ------------
Operating cash flows before
movements in working capital,
tax and interest paid 26.8 26.8 43.8
Sales of financial
investments 436.5 157.7 358.1
Purchase of financial
investments (475.5) (176.7) (465.2)
Interest, rent and dividends
received less investment management
expenses on financial investments 7.1 6.2 15.9
Instalment interest
received 25.9 20.7 41.6
Changes in working
capital:
- Increase in insurance
liabilities
including reinsurance assets,
unearned premium reserves
and deferred acquisition
costs
61.0 13.5 36.5
Increase in insurance and
- other receivables (32.8) (31.3) (49.3)
- Increase in trade and other
payables including insurance
payables
18.5 26.6 31.8
Taxation paid (6.2) (6.7) (17.0)
Net cash generated / (used)
in operating activities 61.3 36.8 (3.8)
---------------- ---------------- ------------
Cash flows from investing
activities
Purchase of property,
plant and equipment,
and software 8, 9 (3.4) (5.2) (8.3)
Net cash outflow from the demerger
of Gocompare.com - - (17.4)
---------------- ---------------- ------------
Net cash used in investing
activities (3.4) (5.2) (25.7)
Cash flows (used in) / generated
from financing activities
Proceeds on issue of
ordinary shares 0.1 0.0 1.3
Interest paid on loans 10 (4.2) (4.2) (8.4)
Gocompare.com debt
raise - - 73.1
Dividends paid 5 (43.9) (30.4) (42.9)
Net cash (used in) / generated
from financing activities (48.0) (34.6) 23.1
Net increase/(decrease) in
cash and cash equivalents 9.9 (3.0) (6.4)
Cash and cash equivalents at
the beginning of the year 25.5 31.9 31.9
---------------- ---------------- ------------
Cash and cash equivalents at
the end of the period 35.4 28.9 25.5
---------------- ---------------- ------------
The notes on pages 15 to 31 form part
of these financial statements.
esure Group plc
Notes to the financial
statements
For the six months ended
30 June 2017
1 . General information
esure Group plc is a company incorporated in England
and Wales. Its registered office is The Observatory,
Reigate, Surrey, RH2 0SG.
The nature of the Group's operations is the writing
of general insurance for private cars and homes.
The Company's principal activity is that of a holding
company.
All of the Company's subsidiaries are located in
the United Kingdom, except for esure S.L.U., which
is incorporated in Spain.
2 . Accounting policies
Basis of preparation
These condensed consolidated interim financial
statements present the Group's financial information
for the six months ended 30 June 2017 and have
been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the European
Union (EU).
They do not include all of the information required
for full annual financial statements, and should
be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December
2016 which are prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted
by the EU.
At a General Meeting on 1 November 2016, the Company's
shareholders approved the demerger of Gocompare.com
plc ('Gocompare.com') and on 3 November 2016 the
demerger was completed.
Under IFRS 5 Non-Current Assets Held for Sale and
Discontinued Operations there is no impact on the
interim financial statements as a result of this
demerger, other than a change in the presentation
of the results of the Gocompare.com business to
discontinued operations in 2016. There is no impact
on the statement of financial position.
These condensed consolidated interim financial
statements have been presented in Sterling and
rounded to the nearest hundred thousand. Throughout
these condensed consolidated financial statements
any amounts which are less than GBP0.05m are shown
by 0.0, whereas a dash (-) represents that no balance
exists.
As required by the FCA's Disclosure and Transparency
Rules, the condensed set of financial statements
have been prepared applying the accounting policies
and presentation that were applied in the preparation
of the Group's published consolidated financial
statements for the year ended 31 December 2016.
These condensed consolidated interim financial
statements have been prepared on a going concern
basis. The Directors have assessed the Group's
prospects and viability for the next 12 months
and beyond, including cash flow forecasts and regulatory
capital surpluses. Based on this robust assessment,
the Directors confirm that they have a reasonable
expectation that the Group has adequate resources
to continue in operational existence for at least
the next 12 months.
The financial information contained in these interim
results does not constitute statutory accounts
of esure Group plc within the meaning of Section
435 of the Companies Act 2006. Statutory accounts
for esure Group plc for the year ended 31 December
2016 have been delivered to the Registrar of Companies.
The auditor has reported on the accounts, their
report:
(i) was unqualified;
(ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis
without qualifying their report; and
(iii) did not constitute a statement under Section
498 (2) or (3) of the Companies Act 2006.
esure Group plc
Notes to the financial statements
For the six months ended
30 June 2017
Critical accounting judgements
3 . and estimates
The Group's 2016 Annual Report and Accounts provide
details of significant judgements and estimates
used in the application of the Group's accounting
policies. There have been no significant changes
to the judgements and estimates during the interim
period.
Key sources of estimation uncertainty and critical
judgements in applying the Group's accounting policies
Insurance contract liabilities
Estimates have to be made both for the expected
ultimate cost of claims reported at the reporting
date and for the expected ultimate cost of claims
incurred but not reported ('IBNR') at the reporting
date. It can take a significant period of time before
ultimate claims cost can be established with certainty
for some types of claims.
The ultimate cost of outstanding claims is estimated
by carrying out standard actuarial projections.
These techniques use past claims information and
development patterns of these claims to project
the expected future claims cost both for notified
and non-notified claims.
Similar judgements, estimates and assumptions are
employed in the assessment of adequacy of provisions
for unearned premium and hence whether there is
a requirement for an unexpired risk provision.
Please refer to note 11 for additional details.
4 . Segmental information
Differences to the Group's 2016 annual report and
accounts in the basis of segmentation
The Group makes decisions on customer acquisition
and retention based on contribution. In addition
to the underwriting contribution from Motor and
Home, a diversified suite of additional insurance
products and services provide opportunities to deliver
enhanced customer contributions.
In order to facilitate the management of the Group
the reporting to the Board of Directors has changed
and the reportable segments under IFRS 8 Operating
Segments reflect this change. The 2016 segments
have been restated to reflect the new segmental
reporting.
Operating segments
The Group has two operating segments as described
below. These segments are also the Group's reportable
segments and represent the manner in which the business
is regularly reported to the Group's executive and
Board of Directors.
Motor underwriting
This segment incorporates the revenues and expenses
attributable to the Group's Motor insurance underwriting
activities inclusive of additional insurance products
underwritten by the Group and related non-underwritten
additional services. Investment income is allocated
to the segment on the basis of premium income.
Home underwriting
This segment incorporates the revenues and expenses
attributable to the Group's Home insurance underwriting
activities and related non-underwritten additional
services. Investment income is allocated to the
segment on the basis of premium income.
esure Group plc
Notes to the financial
statements
For the six months ended
30 June 2017
Segmental information
4 . (continued)
Segmental revenues, expenses and
other information
An analysis of the Group's results by reportable
segment is shown below:
Reviewed
Six months ended 30 June
2017
Continuing
operations
Motor Home total
GBPm GBPm GBPm
Gross written premiums 351.3 42.0 393.3
Earned premiums, net of
reinsurance 275.5 41.2 316.7
Investment income 5.3 0.6 5.9
Instalment interest income 19.2 2.6 21.8
Other income 17.1 2.8 19.9
Total income 317.1 47.2 364.3
Net incurred claims (200.1) (25.4) (225.5)
Claims handling costs (9.3) (1.5) (10.8)
Insurance expenses (53.3) (16.3) (69.6)
Other operating expenses (6.3) (0.6) (6.9)
Total expenses (269.0) (43.8) (312.8)
Trading profit 48.1 3.4 51.5
----------------------------- -------- ------- ------------
Amortisation of acquired
intangibles (1.1)
Non-trading costs (1.0)
Finance costs (4.3)
Profit before taxation 45.1
Tax expense (8.6)
Profit after taxation 36.5
Net expense ratio 22.7% 43.3% 25.4%
Net loss ratio 72.6% 61.6% 71.2%
Combined operating ratio 95.3% 104.9% 96.6%
esure Group plc
Notes to the financial
statements
For the six months ended
30 June 2017
Segmental information
4 . (continued)
Segmental revenues, expenses and other
information (continued)
Reviewed
Six months ended 30 June 2016 (restated)
Continuing
operations
Motor Home total
GBPm GBPm GBPm
Gross written premiums 275.7 44.7 320.4
Earned premiums, net
of reinsurance 222.5 41.9 264.4
Investment income 6.0 0.8 6.8
Instalment interest
income 15.4 2.4 17.8
Other income 14.9 2.5 17.4
Total income 258.8 47.6 306.4
Net incurred claims (170.1) (28.0) (198.1)
Claims handling costs (9.4) (1.8) (11.2)
Insurance expenses (38.5) (14.4) (52.9)
Other operating expenses (6.5) (0.6) (7.1)
Total expenses (224.5) (44.8) (269.3)
Trading profit 34.3 2.8 37.1
----------------------------------------------- ----- ---------------------- ------ -------------------- --- -----------------
Amortisation of acquired
intangibles (1.2)
Non-trading costs (0.4)
Finance costs (4.3)
Profit before taxation 31.2
Tax expense (5.7)
Profit after taxation 25.5
Net expense ratio 21.5% 38.7% 24.3%
Net loss ratio 76.4% 66.8% 74.9%
Combined operating ratio 97.9% 105.5% 99.2%
esure Group plc
Notes to the financial
statements
For the six months ended
30 June 2017
Segmental information
4 . (continued)
Segmental revenues, expenses and other information
(continued)
Reviewed
Year ended 31 December 2016 (restated)
Continuing
operations
total
Motor Home
GBPm GBPm GBPm
Gross written premiums 563.7 91.3 655.0
Earned premiums, net of
reinsurance 470.6 84.3 554.9
Investment income 16.1 2.0 18.1
Instalment interest income 32.6 5.0 37.6
Other income 31.5 5.4 36.9
Total income 550.8 96.7 647.5
Net incurred claims (356.4) (55.6) (412.0)
Claims handling costs (19.5) (3.6) (23.1)
Insurance expenses (85.8) (27.5) (113.3)
Other operating expenses (13.4) (1.1) (14.5)
Total expenses (475.1) (87.8) (562.9)
Trading profit 75.7 8.9 84.6
------------------------------------------------------ ------------------------------ ------------------------- -----------------
Amortisation of acquired
intangibles (2.3)
Non-trading costs (0.9)
Finance costs (8.7)
Profit before taxation from continuing operations 72.7
Tax expense (13.2)
Profit after taxation from continuing operations 59.5
Net expense ratio 22.4% 36.9% 24.6%
Net loss ratio 75.7% 66.0% 74.2%
Combined operating
ratio 98.1% 102.9% 98.8%
5 . Dividends
During the six months ended 30 June 2017, a dividend
per share of 10.5p (GBP43.9m) was declared by the
Board of Directors as a final dividend for the year
ended 31 December 2016. Subsequent to 30 June 2017,
an interim dividend per share of 4.1p (GBP17.1m)
has been declared by the Board of Directors (2016:
interim dividend per share of 3.0p (GBP12.5m)).
esure Group plc
Notes to the financial
statements
For the six months ended 30 June
2017
6 . Earnings per share
Basic
Basic earnings per share is calculated by dividing
the earnings attributable to the owners of the Group
and the weighted average of Ordinary Shares in issue
during the period, excluding Ordinary Shares held
as employee trust shares. A calculation is also shown
based on the earnings from continuing operations
attributable to the owners of the Group.
Diluted
Diluted earnings per share is calculated by dividing
the earnings attributable to the owners of the Group
by the weighted average of Ordinary Shares in issue
during the period adjusted for any dilutive potential
Ordinary Shares. A calculation is also shown based
on the earnings from continuing operations attributable
to the owners of the Group.
The difference between the basic and diluted weighted
average number of shares outstanding during the year,
being 5,428,444 (31 December 2016: 2,009,742; 30
June 2016: 1,370,598), relates to the dilutive potential
of the share-based payment arrangements.
Reviewed Reviewed Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
GBPm GBPm GBPm
Profit after taxation 36.5 30.7 269.2
Weighted average number
of Ordinary Shares (million)
- basic 417.9 416.1 416.6
Unadjusted earnings
per share - basic (pence) 8.7 7.4 64.6
Weighted average number
of Ordinary Shares (million)
- diluted 423.4 417.5 418.6
Unadjusted earnings
per share - diluted
(pence) 8.6 7.4 64.3
Continuing operations earnings per share
Reviewed Reviewed Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
GBPm GBPm GBPm
Profit from continuing
operations, net of tax 36.5 25.5 59.5
Weighted average number
of Ordinary Shares (million)
- basic 417.9 416.1 416.6
Earnings per share from
continuing operations
- basic (pence) 8.7 6.1 14.3
Weighted average number
of Ordinary Shares (million)
- diluted 423.4 417.5 418.6
Earnings per share from
continuing operations
- diluted (pence) 8.6 6.1 14.2
esure Group plc
Notes to the financial
statements
For the six months ended 30 June 2017
6 . Earnings per share (continued)
Discontinued operations earnings per share
Reviewed Reviewed Audited
6 months ended 6 months ended Year ended
30 June 2017 30 June 2016 31 Dec 2016
GBPm GBPm GBPm
Profit from discontinued operations, net of tax - 5.2 209.7
Weighted average number of Ordinary Shares
(million) - basic 417.9 416.1 416.6
Earnings per share from discontinued operations
- basic (pence) - 1.2 50.3
Weighted average number of Ordinary Shares
(million) - diluted 423.4 417.5 418.6
Earnings per share from discontinued operations
- diluted (pence) - 1.2 50.1
7 . Taxation
The Group incurred an effective tax rate of 19.1% in the six months ended 30 June 2017 (30
June 2016: 18.3%; 31 December 2016: 18.2%) on continuing operations. The prevailing UK tax
rate at 30 June 2017 is 19%.
8 . Goodwill and intangible assets
Reviewed
Goodwill Software Acquired brands Customer relationships Total
GBPm GBPm GBPm GBPm GBPm
Cost
As at 1 January 2016 127.7 10.5 65.1 21.5 224.8
Additions in the year - 5.2 - - 5.2
Disposals in the year - (0.2) - - (0.2)
Demerger of Gocompare.com (127.7) (1.7) (40.9) (10.2) (180.5)
As at 31 December 2016 - 13.8 24.2 11.3 49.3
------
Additions in the period - 3.2 - - 3.2
Disposals in the period - - - - -
As at 30 June 2017 - 17.0 24.2 11.3 52.5
------
Accumulated amortisation and impairment
As at 1 January 2016 - 4.7 23.5 15.1 43.3
Amortisation for the year - 2.3 9.0 4.3 15.6
Disposals in the year - (0.2) - - (0.2)
Demerger of Gocompare.com - (1.1) (12.9) (8.1) (22.1)
As at 31 December 2016 - 5.7 19.6 11.3 36.6
------
Amortisation for the
period - 1.2 1.1 - 2.3
Disposals in the period - - - - -
------
As at 30 June 2017 - 6.9 20.7 11.3 38.9
------
Net book value
As at 31 December 2016 - 8.1 4.6 - 12.7
------
As at 30 June 2017 - 10.1 3.5 - 13.6
------
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
9 . Property, plant and equipment
Reviewed
Fixtures,
Land and fittings
buildings and equipment Total
GBPm GBPm GBPm
Cost
As at 1 January
2016 12.9 28.5 41.4
Additions in
the year - 3.4 3.4
Demerger of
Gocompare.com - (2.3) (2.3)
Disposals in
the year - (1.5) (1.5)
Revaluation of land
and buildings 0.0 - 0.0
As at 31
December 2016 12.9 28.1 41.0
Additions in
the period - 0.2 0.2
Disposals in - - -
the period
As at 30 June
2017 12.9 28.3 41.2
Accumulated depreciation
As at 1 January
2016 - 6.6 6.6
Depreciation
for the year 0.1 3.9 4.0
Demerger of
Gocompare.com - (0.9) (0.9)
Disposals in
the year - (1.1) (1.1)
Revaluation of land
and buildings (0.1) - (0.1)
As at 31
December 2016 - 8.5 8.5
Depreciation
for the period 0.0 2.4 2.4
Disposals in - - -
the period
As at 30 June
2017 0.0 10.9 10.9
Carrying amount
As at 31
December 2016 12.9 19.6 32.5
As at 30 June
2017 12.9 17.4 30.3
10 . Financial assets and liabilities
10.1. Financial assets Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
Financial investments designated at GBPm GBPm GBPm
FVTPL:
Shares and other variable yield
securities and units in unit trusts 48.3 39.7 39.3
Debt securities and other fixed
income securities 277.7 491.3 394.5
Deposits with credit institutions 245.7 181.6 209.3
Financial investments held for
trading:
Derivative financial instruments 4.9 0.0 0.1
Financial investments at FVTPL 576.6 712.6 643.2
AFS financial assets:
Debt securities and other fixed
income securities 297.2 44.5 192.6
Shares in unquoted equity investments 4.4 3.7 3.2
Total financial investments: 878.2 760.8 839.0
Loans and receivables:
Insurance and other receivables 227.6 197.7 198.2
Cash and cash equivalents 35.4 28.9 25.5
Total financial assets 1,141.2 987.4 1,062.7
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
Financial assets and liabilities
10 . (continued)
10.1. Financial assets
(continued)
Investments bearing credit risk and cash and cash equivalents, are summarised
below, together
with an analysis by credit rating as at the reporting date:
Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
GBPm GBPm GBPm
Derivative financial
instruments 4.9 0.0 0.1
Debt securities 574.9 535.8 587.1
Deposits with credit
institutions 245.7 181.6 209.3
Cash and cash
equivalents 35.4 28.9 25.5
Investments bearing
credit risk and cash
and cash equivalents 860.9 746.3 822.0
AAA 329.4 273.2 300.9
AA 188.2 185.4 204.8
A 141.9 154.1 155.5
BBB 142.3 56.8 94.0
Below BBB or not rated 59.1 76.8 66.8
Investments bearing
credit risk and cash
and cash equivalents 860.9 746.3 822.0
Shares and other variable yield securities and units in unit trusts do not bear
credit risk.
Cash and cash equivalents are "A" rated.
The Group's allocation to BBB assets has increased in the period as the Group
continues to
implement outcomes from its recent strategic asset allocation review which aims to
deliver
efficient risk adjusted returns.
The movement in the AFS
assets consists of: Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
GBPm GBPm GBPm
AFS assets held at
start of period 195.8 2.4 2.4
Additions in
period/year 103.7 41.2 191.5
Fair value gains in
other comprehensive
income 0.5 4.6 1.9
Fair value gains
reclassified to profit
and loss on disposal 1.6 - -
AFS assets held at
reporting date 301.6 48.2 195.8
In accordance with the Group's investment strategy additional assets acquired during the period
with a fair value of GBP103.7m were designated as AFS.
During the period, in order to maintain an appropriate match between the Group's claims backing
assets and liabilities, certain assets held as AFS were disposed of. Upon disposal, a fair
value gain of GBP1.6m was recycled to the profit and loss statement.
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
Financial assets and
liabilities
10 . (continued)
10.2. Financial
liabilities Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
Financial GBPm GBPm GBPm
liabilities held
for trading:
Derivative
financial
instruments 0.9 11.1 1.6
Other financial
liabilities:
Borrowings (see
below) 122.9 122.7 122.8
Insurance and
other payables 23.3 24.8 17.1
Total financial
liabilities 147.1 158.6 141.5
Reviewed Reviewed Audited
As at As at As at
31 Dec
2017 30 June 2016 31 Dec 2016
Borrowings GBPm GBPm GBPm
10 year
Subordinated
Notes 122.9 122.7 122.8
Total borrowings 122.9 122.7 122.8
Derivative financial instruments are due within one year.
10.3. Fair value
estimation
In accordance with IFRS 13 Fair Value Measurement financial instruments reported at fair value
and revalued properties have been categorised into a fair value measurement hierarchy as follows:
Quoted prices (unadjusted) in active markets for identical assets or liabilities - (Level
1)
Inputs to Level 1 fair values are quoted prices (unadjusted) in active markets for identical
assets. An active market is a market in which transactions for the asset occur with sufficient
frequency and volume to provide pricing information on an ongoing basis.
Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (as prices) or indirectly (derived from prices) - (Level 2)
Fair value measurements that are derived from inputs other than quoted prices included in
Level 1, if all significant inputs required to fair value an instrument are observable, would
result in the instrument being included in Level 2. The majority of assets classified as Level
2 are over-the-counter corporate bonds, where trades are less frequent owing to the nature
of the assets. Inputs used in pricing the Group's level 2 assets include:
-- quoted prices for similar (i.e not identical) assets in active markets;
quoted prices for identical or similar assets in markets that are not active, the
prices are
not current, or price quotations vary among market makers, or in which little
information
-- is released publicly;
-- inputs that are derived principally from, or corroborated by, observable market data by
correlation;
and
for forward exchange contracts, the use of observable forward exchange rates at the
balance
-- sheet date, with the resulting value discounted back to present value.
The Group's policy, should there be a change to the valuation techniques or level of activity
in the market in which that asset is traded, is to transfer the asset between levels effective
from the beginning of the reporting period. In line with the requirements of IFRS 13 Fair
Value Measurement, the Group classifies all debt securities as Level 2 assets with the exception
of Government backed securities which are classified as Level 1 unless they are illiquid.
There have been no changes in respect of the categorisation of debt securities between Levels
1 and 2 during the period.
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
Financial assets and
10 . liabilities (continued)
10.3. Fair value estimation
(continued)
Inputs for the asset or liability that are not based on observable
market data (unobservable
inputs) - (Level 3)
Unobservable inputs have been used to measure fair value to the extent
that observable inputs
are not available, thereby allowing for situations in which there is
little, if any, market
activity for the asset at the measurement date (or market information
for the inputs to any
valuation models). As such, unobservable inputs reflect assumptions
about the inputs that
market participants would use in pricing the asset.
If one or more of the significant inputs is not based on observable
market data, the instrument
is included in Level 3. The Group held Level 3 AFS financial assets of
GBP4.4m as at 30 June
2017 (31 December 2016: GBP3.2m; 30 June 2016: GBP3.7m), representing a
joint venture which
has been valued using a discounted cash flow valuation model.
Under IFRS 13, land and buildings with a carrying value at 30 June 2017
of GBP12.9m (31 December
2016: GBP12.9m; 30 June 2016: GBP12.9m) are classified as Level 3
assets. Owner-occupied properties
are stated at their revalued amounts, as assessed by qualified external
valuers annually,
all with recent relevant experience. These values are assessed in
accordance with the relevant
parts of the current RICS Valuation Standards in the UK ("Red Book").
The valuer's opinion
of fair value was primarily derived using comparable recent market
transactions on arm's length
terms. No sensitivity analysis has been performed due to the nature of
the valuation.
The following table presents the Group's assets and
liabilities measured at fair value:
At 30 June 2017
Level 1 Level 2 Level 3 Total fair
value
Financial GBPm GBPm GBPm GBPm
assets
Derivative
financial
instruments - 4.9 - 4.9
Equity
securities 48.3 - - 48.3
Debt securities 80.9 196.8 - 277.7
Deposits with
credit
institutions - 245.7 - 245.7
Total financial
assets at fair
value through
profit or loss 129.2 447.4 - 576.6
Debt securities 124.8 172.4 - 297.2
Unquoted equity
securities - - 4.4 4.4
Total AFS
financial
assets 124.8 172.4 4.4 301.6
Land and
buildings - - 12.9 12.9
Financial
liabilities
Derivative
financial
instruments - 0.9 - 0.9
Total financial
liabilities
reported at
fair value - 0.9 - 0.9
esure Group plc
Notes to the financial
statements
For the six months ended 30 June 2017
Financial assets and liabilities
10 . (continued)
10.3. Fair value estimation
(continued)
At 30 June 2016
Total Fair
Level 1 Level 2 Level 3 Value
Financial assets GBPm GBPm GBPm GBPm
Derivative
financial
instruments - - - -
Equity
securities 39.7 - - 39.7
Debt
securities 109.1 382.2 - 491.3
Deposits with
credit
institutions - 181.6 - 181.6
Total financial
assets at fair
value through
profit or loss 148.8 563.8 - 712.6
Debt
securities 44.5 - - 44.5
Unquoted equity
securities - - 3.7 3.7
Total AFS
financial assets 44.5 - 3.7 48.2
Land and
buildings - - 12.9 12.9
Financial
liabilities
Derivative
financial
instruments - 11.1 - 11.1
Total financial
liabilities
reported at fair
value - 11.1 - 11.1
At 31 December
2016
Level 1 Level 2 Level 3 Total Fair
Value
Financial assets GBPm GBPm GBPm GBPm
Derivative
financial
instruments - 0.1 - 0.1
Equity
securities 39.3 - - 39.3
Debt
securities 106.9 287.6 - 394.5
Deposits with
credit
institutions - 209.3 - 209.3
Total financial
assets at fair
value through
profit or loss 146.2 497.0 - 643.2
Debt
securities 107.1 85.5 - 192.6
Unquoted equity
securities - - 3.2 3.2
Total AFS
financial
assets 107.1 85.5 3.2 195.8
Land and
buildings - - 12.9 12.9
Financial
liabilities
Derivative
financial
instruments - 1.6 - 1.6
Total financial
liabilities
reported at fair
value - 1.6 - 1.6
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
11 . Reinsurance assets and insurance contract liabilities
11.1. Analysis of recognised amounts
Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
Gross GBPm GBPm GBPm
Claims outstanding (before deduction of salvage and
subrogation recoveries) and claims handling
expenses
717.9 606.4 672.9
Unearned premiums 380.9 308.3 329.4
Total insurance liabilities,
gross 1,098.8 914.7 1,002.3
Recoverable from reinsurers
Claims outstanding 297.9 211.0 271.1
Unearned premiums 24.6 19.0 20.6
Total reinsurers' share of insurance liabilities 322.5 230.0 291.7
Net
Claims outstanding (before deduction of salvage and
subrogation recoveries) and claims handling
expenses
420.0 395.4 401.8
Unearned premiums 356.3 289.3 308.8
Total insurance liabilities, net 776.3 684.7 710.6
Gross claims incurred and reinsurance recoveries for the six months ended 30 June 2017 include
an allowance to reflect changes in the Ogden rate. The impact on net incurred claims is not
material.
11.2. Movements in insurance liabilities and reinsurance assets
The movements in claims recognised, including claims handling expenses, net of reinsurance,
are shown below:
Reviewed Reviewed Audited
As at As at As at
30 June 2017 30 June 2016 31 Dec 2016
GBPm GBPm GBPm
At 1 January 348.8 358.3 358.3
Cash paid for claims settled in period/year (206.6) (207.6) (421.7)
Change arising from:
Current year claims 240.0 218.5 450.9
Prior year claims (14.6) (20.5) (38.7)
Total at end of period/year 367.6 348.7 348.8
Provision for claims handling costs 11.6 12.6 12.5
Salvage and subrogation 40.8 34.0 40.5
Total reserve per statement of financial position 420.0 395.4 401.8
Claims incurred and claims handling expenses as disclosed in the consolidated statement of
comprehensive income comprise:
Reviewed Reviewed Audited
6 months ended 6 months ended Year ended
30 June 2017 30 June 2016 31 Dec 2016
GBPm GBPm GBPm
Net claims incurred 225.5 198.1 412.2
Claims handling expenses 10.8 11.2 22.9
Claims incurred and claims handling expenses 236.3 209.3 435.1
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
12 . Share capital
During the 6 months ended 30 June 2017, 37,359 Ordinary Shares of 1/12 pence were issued by
the Group for GBP0.1m (30 June 2016: nil Ordinary Shares of 1/12 pence were issued by the
Group; 31 December 2016: 1,063,991 Ordinary Shares of 1/12 pence were issued by the Group
for GBP1.4m). The authorised, allotted, called up and fully paid share capital of esure Group
plc as at 30 June 2017 was 417,954,231 Ordinary Shares of 1/12 pence each (30 June 2016: 416,859,167
Ordinary Shares of 1/12 pence each; 31 December 2016: 417,916,872 Ordinary Shares of 1/12
pence each). The shares have full voting and dividend rights.
13 . Related party transactions
Related party transactions during the six months ended 30 June 2017 were consistent in nature
and scope with those disclosed in the Group's Annual Report and Accounts for the year ended
31 December 2016.
14 . Risk management and principal risks and uncertainties
The Board is responsible for prudent oversight of the Group's business and financial operations,
ensuring that they are conducted in accordance with sound business principles and with applicable
law and regulation. The Group's 2016 Annual Report and Accounts provide details of the Group's
risk management framework, organised around the core elements of Risk Strategy and Appetite,
Risk Governance and the associated Risk Reporting.
14.1 Measurement of risk
The risk management framework is designed to ensure that the Risk Committee receives timely
and appropriate reporting on our exposure to existing and emerging risks in each of the core
risk categories.
Strategic risks and the reputational consequences of these risk exposures are considered within
this risk reporting.
Such reporting is supported by:
-- Updates to the Group's risk registers covering current and emerging risks.
-- Reports on events that have resulted in actual or potential financial or reputational losses
to the Group or its customers.
-- The results of stress, scenario and sensitivity testing ("SST") as well as the modelling of
our risks within our capital model.
-- The findings, recommendations and management actions arising from reviews conducted by the
Risk, Compliance and Internal Audit functions.
A key strength of the Group's risk management strategy is the integration of risk assessment
and evaluation into the Group's business operations, planning and capital management.
14.2 Risk sensitivities
An annual suite of stress tests and scenario analysis, including insurance (underwriting,
reserves and catastrophe), market, operational and credit related scenarios are selected and
refined through consultation within the business and by reference to significant events to
ensure that the scenarios reflect the current risk environment. The suite of SSTs includes
circumstances that would render the business model unviable, known as reverse stress tests.
The output from the SST exercise is embedded into our capital modelling data, our business
planning and ORSA process. Some have been used to set risk appetite (e.g. liquidity stress)
and some have been used to inform margin setting (e.g. reserve stresses).
The material SSTs take into consideration the most up to date business plan and consider the
knock on impacts over multiple years. Impacts on technical provisions including risk margin,
SCR, the amount of qualifying debt and impacts on tax are also considered.
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
14 . Risk management and principal risks and uncertainties (continued)
14.2 Risk sensitivities (continued)
An economic capital model is used to stress the business plan at various return periods, with
the ORSA specifically considering the 1-in-25 year event and 1-in-200 year event levels; the
modelled events are a combination of impacts occurring together during a year.
Overall, the analysis indicates that the solvency position has sufficient contingent management
actions available to maintain solvency consistent with regulatory requirements at the 1-in-200
stress level.
14.3 Principal risks and uncertainties
14.3.1 Underwriting risk
Definition
Underwriting/insurance risk is the risk of loss or of adverse change in the value of insurance
liabilities, due to inadequate pricing and/or provisioning assumptions.
Key Elements of underwriting risk
-- Pricing and underwriting
-- Reserves
-- Catastrophe
Underwriting risk is the most material risk for the Group. It represents the uncertainty in
the profitability of the business written due to variability in the value and timing of claims
and premium rates - this can impact historic (reserve risk) as well as future exposures (underwriting
and catastrophe). There is some future uncertainty within the market in terms of the future
rating environment and potential legal changes through the government consultation on Ogden
discount rate and whiplash reforms.
Mitigation
There is strong and regular monitoring in place of the external environment to understand
-- and react to the changing market, ensuring that we are well placed to benefit from any developments.
There is a strong claims management process that ensures that there is strong customer service,
-- management of claims costs and management information to understand claims trends.
There is a robust monitoring process in place that tests the key variables affecting loss
performance, including loss ratios, risk mix, pricing, quote conversion, renewal retention
-- ratios, claims costs, claims frequency and the adequacy of reserves.
-- There is use of external data to support our analysis of risk exposure for underwriting and
catastrophe risk.
There is a prudent approach to reserving risk with a risk appetite to hold a margin above
the actuarial best estimate. The Group's Actuarial function analyses and projects historical
claims development data and uses a number of actuarial techniques to both test and forecast
claims provisions. In addition, independent external actuaries assess the adequacy of the
-- Group's reserves.
-- There is reinsurance in place to protect the business from large losses and catastrophe events.
14.3.2 Market risk
Definition
Market risk represents the uncertainty in the financial position due to fluctuations in the
level and in the volatility of market prices of assets and liabilities.
Key Elements
-- Interest rate
-- Equity
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
14 . Risk management and principal risks and uncertainties (continued)
14.3 Principal risks and uncertainties (continued)
14.3.2 Market risk (continued)
Mitigation
Market risk is managed through regular monitoring, including the drivers of investment return
and value at risk measures, counterparty exposures and interest rate sensitivities of our
assets and liabilities. As part of this the Group considers the matching of the investment
-- portfolio with its insurance liabilities to mitigate and manage this risk.
-- Oversight of the Group's investment strategy is undertaken by the Investment Committee.
Our investment strategy does not expose the Group to material currency risk or the risks arising
-- from active trading of derivatives.
14.3.3 Credit risk
Definition
Credit risk is the risk of loss or of adverse change in the financial situation, resulting
from fluctuations in the credit standing of, counterparties and any debtors to which the Group
is exposed.
Key Elements
-- Reinsurance counterparties
-- Supplier debtors
-- Spread
-- Concentration risk
-- Default by investment counterparties
Mitigation
There are risk appetite metrics set against the creditworthiness of reinsurers and concentration
risk - these are monitored prior to finalisation of any contract and on an ongoing basis to
-- ensure that it remains in line with our risk appetite.
As part of our supplier management process credit exposures to third parties are regularly
-- monitored and controlled.
The Group manages the level of investment counterparty credit risk it accepts by placing limits
on its exposure to a single counterparty or groups of counterparties, and on geographical
counterparties and geographical segments. Such risks are subject to regular review within
-- the Investment Committee.
-- Limits set with investment managers mitigate material market risk concentrations.
14.3.4 Liquidity risk
Definition
Liquidity risk is the risk that the Group is unable to realise investments and other assets
in order to settle financial obligations when they fall due.
Key Elements
-- Liquidity risk
The Group's risk appetite is aligned to a 1-in-200 year liquidity stress, which is assessed
by the capital model, as our liquidity position is within appetite no additional capital is
held from the Group's own assessment of risk and solvency requirements for liquidity risk.
Mitigation
The Group continues to monitor its liquidity risk by considering the Group's operating cash
flows, stressed for catastrophe scenarios, dividend payouts, liquidity strains and investment
-- strategy to mitigate this risk.
-- Oversight of liquidity risk is undertaken by the Financial Risk Committee.
esure Group plc
Notes to the financial statements
For the six months ended 30 June 2017
14 . Risk management and principal risks and uncertainties (continued)
14.3 Principal risks and uncertainties (continued)
14.3.5 Operational risk
14.3.5.1 - Operational Risk
Definition
Where there is a financial loss or reputational damage due to inadequate or failures with
processes, people or systems - either within the Group or within material partners.
Key Elements
-- Business processes
-- IT systems and disaster recovery
-- Data Security and Cyber Risk
-- Infrastructure risk and business continuity
-- Financial Crime and Fraud
-- Outsourcing
-- Distribution
Mitigation
Ownership and management of the operational risks sit with the first line business functions.
There are also specialist teams that reside within the business functions that provide expertise
and support, including for business continuity, IT disaster recovery, fraud and financial
-- crime and cyber risk.
Oversight, support and challenge are provided by the second line risk function which works
-- closely with the first line business and specialist functions.
Operational (including Conduct and Customer) risk identification, assessment and management
are embedded within management processes. These processes are supported by the second line
-- Risk team, including the annual risk and control self assessment.
The Group has a robust governance and risk framework in place which provides an effective
structure within which operational risks are identified, measured and managed. It ensures
that there is clear ownership for risks with effective reporting and escalation mechanisms,
-- supporting management oversight and decision-making.
14.3.5.2 - Conduct Risk
Definition
The Group operates in a regulated environment therefore there is a risk of reputational or
financial damage driven by regulatory or legal intervention.
Key Elements
-- Legal and Political Risk
-- Conduct and Compliance Risk
-- Regulatory Risk
Mitigation
There is a low appetite for this risk and this is reflected in management decision-making,
-- with close monitoring of key risk indicators.
Board oversight is ensured by upward reporting of a suite of customer and conduct risk appetite
-- statements and measures.
The Group continues to monitor legal and regulatory developments in the UK and Europe, through
our close relationship with our regulators (the FCA and PRA) and other official bodies and
the use of proactive risk management tools and processes to mitigate our exposure to regulatory
-- risk.
-- Our culture and tone from the top ensures the interests of our customers and their fair treatment
is paramount.
We have a strong governance framework and our Conduct Risk and Customer Committee reviews
-- all aspects of our customer service.
15 . Post balance sheet events
There are no post balance sheet events to be declared.
esure Group plc
DIRECTORS' RESPONSIBILITY STATEMENT IN RESPECT OF THE HALF YEARLY FINANCIAL REPORT
We confirm that to the best of our knowledge:
The condensed consolidated financial statements for the six months ended 30 June 2017 have
been prepared in accordance with International Accounting Standard 34 ("IAS 34") as adopted
by the EU.
The interim management report includes a fair review of the information as required by:
-- DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of the important
events that have occurred during the first six months of the current financial year and their
impact on the condensed set of consolidated financial statements and a description of the
principal risks and uncertainties for the remaining six months of the financial year; and
-- DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions
that have taken place in the first six months of the current financial year and that have
materially impacted the financial position or performance of the Group during the period;
and any changes in the related party transactions from the Group's consolidated financial
statements for the year ended 31 December 2016 that could do so.
Stuart Vann Darren Ogden
Chief Executive Officer Chief Finance Officer
Signed on behalf of the Board on 2 August 2017
esure Group plc
INDEPENT REVIEW REPORT TO ESURE GROUP PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 30 June 2017 which comprises the
condensed consolidated statement of comprehensive income, the condensed consolidated statement
of changes in equity, the condensed consolidated statement of financial position, the condensed
consolidated statement of cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the
condensed set of financial statements in the half-yearly financial report for the six months
ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK
and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim
financial information consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether it contains
any apparent misstatements or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half-yearly financial report in
accordance with the DTR of the UK FCA.
The annual financial statements of the group are prepared in accordance with International
Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing
the condensed set of financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report based on our review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement
to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has
been undertaken so that we might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the company for our review work,
for this report, or for the conclusions we have reached.
Philip Smart
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
2 August 2017
esure Group plc
Glossary of terms
The definitions set out below apply throughout this document, unless the context requires
otherwise.
"Board" means the board of Directors of the Company from time to time.
"Business" means the business of the Group.
"Company" means esure Group plc, a company incorporated in England and Wales with registered
number 7064312 whose registered office is The Observatory, Castlefield Road, Reigate, Surrey
RH2 0SG.
"Flood Re" is a not-for-profit flood reinsurance fund, owned and managed by the insurance
industry.
"Footprint expansion" means the Group's underwriting initiative to quote competitively for
more customers.
"Gocompare.com" is a company incorporated in England and Wales with registered number 6062003
whose registered office is Unit 6, Imperial Courtyard, Newport, Gwent NP10 8UL.
"Group" or "esure Group" means the Company and its subsidiaries.
"IFRS" means International Financial Reporting Standards.
"Ordinary Shares" means the ordinary shares with a nominal value of 1 12 pence each in the
capital of the Company.
"ORSA" means Own Risk and Solvency Assessment and aims to assess the overall solvency needs
of an insurance company.
"SFCR" means Solvency and Financial Condition Report.
"the Notes" means the GBP125 million 6.75% ten year tier two Subordinated Notes issued on
19 December 2014.
Alternative performance metrics
Throughout this report, the Group uses a number of Alternative Performance Measures ("APMs").
The Group prepares its financial statements under IFRS and by definition these measures are
not IFRS metrics.
These APMs are used by the Group, alongside IFRS measures, for both internal performance analysis
and to help shareholders and other users of the Interim Report and financial statements to
understand the Group's performance better.
Additional Services Revenue ("ASR")
(1) "Non-underwritten additional insurance products" is the commission margins for the Group
generated from sales of such products.
(2) "Policy administration fees and other income" is the income received as a result of administration
charges, e.g. as a result of mid-term alterations to policy details by the policy holder and
cancellation charges. Other income includes introduction fees where the Group does not have
a continuing relationship with the customer.
(3) "Claims income" is the income generated by the Group from the appointment of firms used
during the claims process, including car hire and medical suppliers. This also includes legal
panel membership fees from Scotland.
(4) "Non-underwritten additional services" is the total income from the Group's non-underwritten
additional services reporting segment.
(5) "Underwritten additional insurance products" is the revenue calculated by deducting the
Group's claims costs associated with is underwritten additional insurance products from the
gross written premiums relating to these products in a particular period.
(6) "Non-underwritten additional services trading profit" is the total non-underwritten additional
services income less the total associated expenses.
"Combined operating ratio" is a metric for assessing the performance of a general insurance
firm, calculated as the loss ratio plus the expense ratio, both of which relate to underwriting
trading profit.
"Contribution" means the trading profit/(loss) generated from underwriting, non-underwritten
additional services revenues and investments
"Expense ratio" means net insurance expenses plus claims handling costs as a percentage of
earned premiums, net of reinsurance.
esure Group plc
Glossary of terms (continued)
"Loss ratio" means claims incurred net of reinsurance as a percentage of earned premiums,
net of reinsurance.
"In-force policies" means the number of live policies as at the reporting date.
"Own funds" are the funds the Group holds under the rules of the Solvency II capital adequacy
regime.
"Solvency Capital Requirement" is the minimum amount of funds that the Group is required to
hold under the Solvency II capital adequacy regime. The requirement is based on the notional
cost of a 1-in-200 year loss.
"Trading profit" is earnings before interest, tax, non-trading expenses and amortisation of
acquired intangible assets.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QLLFBDVFZBBV
(END) Dow Jones Newswires
August 03, 2017 02:00 ET (06:00 GMT)
1 Year Esure Chart |
1 Month Esure Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
