Esure Group plc has reported a strong financial performance for 2024, following the successful completion of a £200 million transformation program that revitalised the company’s technology, operations, and culture. The insurer, which is backed by private equity firm Bain Capital, has emerged from a period of transformation with substantial growth across key financial metrics, including turnover, profit, and customer numbers.
In 2024, esure’s in-force policies grew to 2.13 million, up from 2.07 million the previous year, as the company focused on digital expansion. The company’s turnover increased by 14% to £1.111 billion, compared to £973 million in 2023, while net insurance revenue climbed to £888.8 million, up from £752.1 million. According to Investing.com, these gains were attributed to the company’s successful migration of customer policies and claims to a cloud-native platform.
Esure also posted a significant turnaround in profitability. Trading profit reached £126.8 million, a stark contrast to the £16.7 million loss recorded in 2023. The company’s profit margin rose by 15.3 percentage points to 13.2%, while the IFRS profit after tax moved from a £60.1 million loss to a gain of £57.7 million. The net loss ratio decreased by 14.2 percentage points to 64.5%, and the combined operating ratio improved to 84.5% from 102.5%, reflecting improved efficiency and profitability.
CEO David McMillan (pictured) attributed the company’s strong performance to the completion of its three-year revamp. “We set out with the objective of building the UK’s preeminent digital insurer,” McMillan said. He highlighted that the company now serves 80% of its customers digitally, more than doubling its digital reach from previous years.
The company also enhanced its data and AI capabilities, processing 23,000 data events per minute and updating its pricing and underwriting models more than 135 times during the year to respond to market conditions.
Esure’s solvency coverage ratio improved to 172%, up from 151% in 2023, and return on tangible equity rose sharply to 39.9%, a significant turnaround from a negative 10.9% in the previous year.
Looking ahead, Esure aims to maintain its focus on profitable and sustainable growth, leveraging its updated technology and data infrastructure while continuing its cautious approach to pricing and underwriting.
The company’s robust results come amid ongoing interest from potential acquirers, with Bloomberg reporting that Allianz SE, Sampo Oyj, and other firms are considering bids for esure. However, no formal bids have been confirmed as of yet.
For further details, esure’s full Annual Report and Accounts, alongside the Solvency and Financial Condition Report, are available on its website.
What are the implications of technological upgrades for the insurance industry? Share your insights below.
