Bain-backed esure swings to full-year profit in 2024

By Ryan Hewlett

April 1 - (The Insurer) - Esure Group returned to the black in 2024 with a full-year trading profit of 126.8 million pounds ($163.9 million), with the UK home and motor insurer forecasting continued expansion following a successful transformation programme.

Bain Capital-backed esure's trading profit increased more than eight-fold in 2024 from a loss of 16.7 million pounds in the prior year. Profit before tax rose 184% to 74.8 million pounds, up from a loss of 88.6 million pounds in 2023.

IFRS profit after tax rose to 57.7 million pounds in 2024, up from a loss of 60.1 million pounds the previous year.

The insurer’s combined ratio improved to 84.5% in 2024 from 102.5% a year earlier. The group’s net loss ratio improved by 14.2 percentage points to 64.6%, down from 78.7% in the prior year.

Turnover rose by 138 million pounds to 1.11 billion pounds in 2024. Esure said the increase was driven by “record-breaking” increased business volumes in both its motor and home portfolios, with total in-force policies up 60,000 in 2024 to 2.13 million.

The group’s solvency coverage ratio improved to 172% in 2024, compared with 151% in 2023, and the return on tangible equity rose to 39.9% from -10.9%.

CEO David McMillan said the turnaround in performance was attributed to the completion of the company’s multiyear transformation, which included the migration of all customer policies, claims and data points onto a cloud-native platform.

The programme, which cost 200 million pounds and took three years to complete, also involved the decommissioning of legacy technology systems, eradication of dual running costs and promotion of customer-focused digital channels.

“We made excellent progress to deliver our strategy and built strong foundations to achieve our long-term growth plans,” said McMillan.

Looking ahead, esure, which includes the Sheilas’ Wheels and First Alternative brands, said it expects near-term uncertainty in the UK motor market following strong 2024 results and the recent change to the Ogden rate.

Reuters reported last month that Belgian insurer Ageas had retained advisers to explore a bid for esure, citing sources who also named Allianz as another interested party.

Bain Capital was reported to have tapped advisers for the possible sale of esure, formed in 2000 by Direct Line founder Peter Wood, in September last year, according to Reuters.