Shares in online insurer Esure have taken a dive of around six per cent after announcing a low interim dividend of 2.5p in today's half yearly report (release).
The firm saw pre-tax profits up 15.2 per cent to £56.9m in the six months ended 30 June.
Peter Wood, chairman of Esure, commented:
Our first interim results as a listed company show continued volume and profit growth with improvements in our combined operating ratio and underwriting performance. Our strategy has enabled us to adapt well to our changing marketplace and has stood us in good stead.
We have been listed for three months and are pleased to declare an interim dividend of 2.5 pence per share, representing a payout ratio of 70%.
Eamonn Flanagan, Shore Capital:
A solid set of maiden figures for esure, for the six months to end June, with a gentle 'beat' against consensus for each of the metrics. However, the interim dividend of 2.5p was much lower than consensus.
Coverage pending, but given the uncertainty in the UK personal motor insurance market we remain negative on this whole sub-sector of the non-life market.
Hari Sivakumaran, Oriel Securities:
We feel esure's focused low-risk underwriting approach, high retention of existing policies, efficient cost base, and the less sensitive nature of its motor book to falling rates mean it is better placed than its peers to withstand increased competitive pressure.