Esure raises full-year guidance as profits jump 45 per cent in first half

 
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Esure was well-known for adverts starring Michael Winner (Source: Esure/Youtube)

A rise in profits during the first half at Esure drove the insurer to raise its full-year guidance this morning.

The figures

Pre-tax profit from continuing operations rose 44.6 per cent to £45.1m.

Primarily known as a car insurer thanks to iconic adverts fronted by the late Michael Winner more than a decade ago, Esure's motor insurance packages led the growth.

Gross written premiums in the motor sector were up 27 per cent to £351.3m.

But home insurance premiums were down six per cent to £42m. The company said this was due to "disciplined underwriting in challenging market conditions".

Shares in the company were trading up just over two per cent this morning.

Read more: Underinsurance: Ministers have kicked things off... insurers must step up

Why it's interesting

Chief executive Stuart Vann reiterated that the company had increased prices in the first half of the year, offsetting increased costs to the business.

The FTSE 250 company managed to avoid being hard-hit by new government rules on discount rates earlier this year, reckoning with a relatively small impact of around £1m.

It also successfully span-off GoCompare at the end of last year, leaving both firms in better shape. GoCompare profits rose 22 per cent in the first half.

On the back of today's results, the company said it now expected full-year figures to be at the higher end of previous predictions. Growth in premiums is therefore expected to be 20 per cent, with a 10 per cent rise in in-force policies

The group also stated its ambition is to grow to 3 million in-force policies by 2020. The current number is under 2.3 million.

Read more: Direct Line shrugs off discount rate cut to grow premiums in first quarter

What the company said

Chairman Sir Peter Wood said: "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."