Shares in Esure yesterday slumped 7.3 per cent after the firm reported that its cuts to car insurance prices had fuelled a 7.4 per cent drop in premiums over the past three months.
Esure is behind Sheilas’ Wheels and price comparison site GoCompare.com. It said that while it was writing broadly the same number of insurance policies, it had to reduce prices to stay competitive.
Esure had almost two million insurance policies in force at the end of September, up 2.5 per cent on the same stage last year, but in the quarter premiums fell to £149.6m. Car premiums fell 8.8 per cent while home insurance was flat.
“We have seen some signs of rate stabilisation in the UK motor market, but it is too early to say if this represents a turn in the motor rating cycle or is a consequence of rating seasonality,” said Stuart Vann, chief executive.
Esure shares ended the day at 222p.