Esure takes small hit from injury claim change; sees 2016 ahead of forecasts

Esure Group said its 2017 capital position would be hit by £2m and its reserve margin allowance had to be increased to £3m from £2m after a larger than expected cut to the discount rate used to calculate personal injury claim payouts.

Esure added that its low risk approach to underwriting and conservative reinsurance programme ”materially reduces the group's exposure to large claims costs and therefore the impact that a movement in the discount rate has on its financial performance and solvency position”.

The company also gave a trading update for 2016, with gross written premiums up 19% to £655m, in-force policies up 9% to 2.2m.

“The group's profit will be ahead of market expectations largely driven by a strong investment return,” esure said.

Chief executive Stuart Vann said said: "We are now in full growth mode and have pushed forward with our strategy in 2016 delivering strong growth in premiums and profitability.”

“Our footprint expansion programmes are building momentum with further segments released towards the end of the year, giving us opportunities to continue our growth ambitions.”

"Our low risk approach to underwriting and conservative reinsurance programme mitigated much of our exposure to the change in the Ogden discount rate and leaves us well placed within the market compared to our peers.

"Through our focused and controlled approach to underwriting, underpinned by our contribution focus, we are on track to deliver increased value in 2017 and beyond."