ESURE yesterday saw more than £20m wiped off its stock market value after the insurer’s maiden results failed to meet expectations due to falling motor premiums.
The company, which owns the female-focused Sheila’s Wheels brand, energised the market when it went public in a high-profile £1.2bn IPO in March. But yesterday it warned premium growth would slow in the second half due to fierce competition, while also confirming a lower-than-expected dividend.
The shares, which peaked at 333p last month, closed down 21 per cent yesterday at 246p – the first time it has dipped beneath the float price.
However, Esure insists that improvements in claims rates and investment in new back-end systems will substantially “mitigate any earnings impact” when it announces full-year results.
The company also said Sheila’s Wheels is actually benefiting from a change in EU rules that makes it illegal to offer preferential rates to customers of different genders.
Because the brand has a large number of existing female customers it can offer competitive rates without actively choosing to filter out men.