TIDMELLA
RNS Number : 2951N
Ecclesiastical Insurance Office PLC
28 September 2021
2021 INTERIM RESULTS
Ecclesiastical Insurance Office plc 28 September 2021
Ecclesiastical Insurance Office plc ("Ecclesiastical"), the
specialist financial services group, today announces its 2021
interim results. A copy of the results will be available on the
Company's website at www.ecclesiastical.com
Group overview
-- Profit before tax of GBP46.5m (H1 2020: loss before tax
GBP59.7m), primarily driven by investment returns as a result of
improving market conditions.
-- Gross Written Premiums (GWP) grew 12% to GBP226.5m (H1 2020:
GBP202.5m) , supported by strong retention and rate increases as
well as new business wins.
-- Underwriting profit of GBP2.5m (H1 2020: loss of GBP1.3m).
The overall underwriting result was impacted by a strengthening of
reserves in our Australian business.
-- We remained in a robust and strong capital position with AM
Best and S&P affirming our excellent and strong ratings.
-- We continued to prioritise the wellbeing of our colleagues
and in June, we were awarded Best Companies' 2 star accreditation
demonstrating 'outstanding' levels of employee engagement.
-- Continued external recognition of the Group as a trusted and
specialist financial services organisation. This included being
named as the UK's most trusted home insurer for the 13th time by
independent ratings agency Fairer Finance, and our Canadian team
was named one of the Top Employers for Young People for the ninth
consecutive year. Ecclesiastical UK won Digital Insurance
Innovation of the Year Award at the British Insurance Awards for
Smart Properties, while EdenTree was named Best Ethical Investment
Provider at the 2021 Investment Life and Pensions Moneyfacts Awards
for the 13th time.
Mark Hews, Group Chief Executive Officer of Ecclesiastical,
said:
"After a challenging year in 2020 due to the impact of the
COVID-19 pandemic, I'm delighted that the Group has made an
excellent start to 2021 and reports a profit before tax of GBP46.5m
(H1 2020: loss before tax GBP59.7m). Our decision to hold to our
long-term investment strategy was validated as financial markets
recovered from the lows of last year, helping us to deliver
impressive investment returns and outperform the indices for most
asset classes. We remain in a robust and strong capital position
with AM Best and S&P affirming our excellent and strong
ratings.
"In the UK and Canada, our GI businesses have reported robust
growth due to rate increases, solid retention and new business. In
Australia, we have strengthened our reserving following a rise in
historic liability claims in the first half of the year. This has
resulted in an overall underwriting performance of GBP2.5m (H1
2020: underwriting loss GBP1.3m).
"Increasing investor confidence saw strong inflows of money into
our award-winning investment management business EdenTree.
Bolstered by new recruits, EdenTree maintained its reputation as
one of the leading responsible and sustainable investment firms
with the launch of three new funds in July.
"With an ambition to grow our business to give more to those in
need, the Group has remained committed to supporting charities and
communities throughout the pandemic and we're proposing to make a
donation to our charitable owner in the weeks ahead . We launched
our third annual Movement for Good awards, which will see us give
GBP1m to charities across the UK and Ireland. On behalf of all our
charitable beneficiaries, I would like to thank all those who
continue to support the Group's work.
"The first half of 2021 continued to be a challenging period for
our colleagues and customers due to the ongoing pandemic
restrictions. I'm proud of the way our teams across the business
have continued to show great resilience and adaptability to deliver
for our customers, brokers and communities. For the first time in
May, we ran the b-Heard survey to give colleagues an opportunity to
have their say on working at Ecclesiastical. I'm delighted that we
were awarded Best Companies' 2 star accreditation demonstrating
'outstanding' levels of employee engagement. As we return to a more
normal way of life, we will continue to prioritise the health,
safety and wellbeing of our employees as we embrace new and more
flexible ways of working.
"The easing of restrictions and the improving economic
conditions are helping many of our customers recover from the
financial impact of successive lockdowns and we are settling the
small number of business interruption claims, where cover exists,
as quickly as possible.
"We continue to make good progress against our strategic
priorities. We launched a new visual identity for the
Ecclesiastical Insurance brand and opened our head office in
Gloucestershire, which is now welcoming colleagues with flexible
ways of working. We are also continuing to invest in new systems to
improve our efficiency and enhance the customer experience.
"As a responsible insurer, we are not only supporting and
protecting customers, but we are also building our climate change
commitments for the long-term too. We've been members of voluntary
initiative ClimateWise for a number of years, and have established
a climate strategy group that is considering how we can best
respond to the climate crisis. Already, as part of our strategy we
have committed to managing our portfolio of investments in a
responsible and sustainable way. In January of this year, we
adopted a new investment strategy that not only avoids investment
in businesses that cause social harm but also proactively seeks to
invest in markets that have positive impacts, as well as
considering environmental, social and governance factors in every
investment case.
"Another way we support our climate change commitments is by
helping our customers reduce their impact through our risk
management advice and guidance. We recently launched our
Ecclesiastical Smart Properties proposition, which uses
cutting-edge technology to protect properties. This technology not
only protects customers from fires and escape of water, but can
also help to save money and reduce the building's carbon footprint
as well.
"Looking ahead, I'm excited about the future of the business. In
the UK, we are investing significantly and have the appetite and
capacity to grow across all the sectors we operate in, with an
ambition to be the first choice for brokers placing business in our
specialist markets. By growing our business and generating profits
to donate to charity, we are fulfilling our purpose as an
organisation committed to the greater good of society."
Results summary
H1 2021 H1 2020
Gross written premiums GBP226.5m GBP202.5m
Group underwriting profit/(loss)* GBP2.5m (GBP1.3m)
Group combined operating ratio* 98.1% 101.1%
Investment return/(losses) GBP58.2m (GBP48.9m)
Profit/(loss) before tax GBP46.5m (GBP59.7m)
30 June 2021 31 Dec 2020
Net asset value GBP621m GBP569m
Solvency II capital cover (solo) 224% 197%
*The Group uses APMs to help explain performance. More
information on APMs is included in note 16.
Financial highlights
General Insurance - UK and Ireland
UK and Ireland GWP grew by 7% to GBP143m in the six months to 30
June 2021 (H1 2020: GBP134m). This has been driven by rate growth
and new business, particularly across education and our regions.
The business reported an underwriting profit of GBP15.3m and a net
combined ratio of 81.5% (H1 2020: GBP2.7m profit, COR 96.7%)
representing the strong performance in both property and casualty
accounts.
The property result benefited from relatively benign weather
conditions, despite some storm and freeze events earlier in the
year. Our liability business has continued to perform well into
2021 with prior year claims broadly as expected and a current year
claims experience similar to last year.
General Insurance - Canada
The Canadian business has reported GWP of GBP32.4m (H1 2020:
GBP28.3m), delivering premium growth of 15.1% in local currency,
driven by high retention and rate strengthening.
Adverse development of prior year liability claims has resulted
in a small underwriting loss of GBP0.4m (H1 2020: GBP0.1m profit)
and a COR of 101.5% (H1 2020: 99.9%). However, benign weather in
2021 has led to good returns in the property portfolio, helping to
offset the adverse development of prior year liability claims.
General Insurance - Australia
Our Australian business continues to be successful in generating
new business and strengthening rate, with premium growth of 21.9%
in local currency leading to reported GWP of GBP49.6m (H1 2020:
GBP38.3m).
The business reported an underwriting loss of GBP3.9m (H1 2020:
GBP2.1m). The result was impacted by the Western Australia
bushfires and New South Wales storms, as well as strengthening of
historic liability claims.
Investment Returns
Our Investment portfolio has performed exceptionally well in the
first half of the year, with the markets bouncing back from 2020
where worldwide markets were impacted by COVID-19. The Group's net
investment return was a profit of GBP58.2m (H1 2020: GBP48.9m loss)
predominantly driven by unrealised fair value gains as markets
returned to close to pre-pandemic levels together with a change to
valuation inputs for some unlisted equities. Income from financial
assets was GBP14.2m (H1 2020: GBP16.8m) reflecting the continued
low interest rate environment and downwards pressure on yields.
We discount some of our liability claims reserves at a rate that
reflects the yield on long-term investment grade bonds. The
reserves relate to liability policies, written over many decades,
and represent very long-tail risks. The movement in yields from the
year end resulted in a gain of GBP7.6m in the first six months of
the year.
As economic reopening continues after the dual headwinds from
the pandemic and Brexit, this has continued to be beneficial for
our investment return. We continue to take a long-term view of risk
and our approach to the management of risks resulting from the
Group's exposure to financial markets is outlined in note 4 to our
latest annual report.
Asset Management - EdenTree
In our investment management business, EdenTree, fee income grew
by 9.8% to GBP6.8m (H1 2020: GBP6.2m) reflecting positive market
movements and new flows. As expected, our emphasis on the continued
investment in the business and people contributed to a loss of
GBP1.2m (H1 2020: GBP0.2m) . EdenTree were pleased to report net
new money for funds not held by the Group of GBP46.8m.
Broking and Advisory - SEIB Insurance Brokers
Despite the competitive market, SEIB has continued to perform
well and reported a half year profit before tax of GBP1.7m (H1
2020: GBP1.4m). SEIB general commission and fees, excluding profit
share commission, has increased by 17.0% in the first half of the
year to GBP5.6m (H1 2020: GBP4.8m) as a result of new business.
Life Business
Our life insurance business, reported a profit before tax of
GBP0.7m at the half year (H1 2020: GBP0.2m loss). Assets and
liabilities are well matched, though we expect small variances as
the margins in reserves unwind.
Taxation
The Group's taxation charge in the period of GBP18.1m (H1 2020:
GBP8.3m credit) is principally due to deferred tax charges from a
change in the carrying value of the Group's pension obligations and
as a result of the UK corporation tax rate changing to 25% from 1
April 2023 and its impact on the calculation of deferred tax
liabilities.
Balance Sheet and Capital Position
Total shareholders' equity increased by GBP51.6m to GBP620.8m in
the first six months of the year. Profits in the period were
primarily driven by the investment return. There were also
actuarial gains, net of tax of GBP28.2m, on retirement benefit
plans. In February 2021 the Group raised EUR 30m in nominal amount
of Tier 2 Capital by way of a privately-placed issue of 20-year
subordinated bonds.
Strategic highlights
Despite the challenges of the pandemic, the Group continued to
focus on its ambition to become the most trusted and ethical
specialist financial services group. Our charitable purpose remains
at the core of our Group, offering distinctive positioning and
support for our customers and our communities. This is evident in
our strategy which was adapted in mid-2020 to respond to the
challenges faced by customers, brokers and wider society as a
result of the pandemic.
We have continued to invest in our Group and people to drive
business benefit and enable charitable giving to our communities.
This is underpinned by our resilience and financial strength that
support our trusted and ethical approach which is central to our
strategy. Our current strategy is based on three themes, which
encompass our longer-term ambitions, our short term priorities and
our response to the pandemic.
Support and protect: the first strategic theme seeks to support
and protect our customers, communities and our colleagues. This is
a key focus area given the backdrop of the pandemic and provides a
range of commercial and business activities that support our
customers and our core purpose. This theme also focuses on our
people, our teams and their well-being.
Innovate and grow: the world around us has changed over the past
few decades and the needs of our customers and communities continue
to change as part of this evolution. The Group continues to
innovate to find new ways to meet the changing needs of our
customers and communities. We have been building new propositions,
including new product launches in our risk management and loss
prevention solutions which support our growth ambitions. Together
these propositions also deepen understanding of our portfolio which
drive underwriting actions and improve profitability as well as
improving outcomes for our customers.
Transform and thrive: the third strategic theme focuses on
investment in our Group, helping our businesses to transform and
thrive by investing in new technology, our people and our premises.
Our new head office building enables flexible ways of working and
highlights our drive to provide opportunities to increase our
efficiency across the Group. Some of our investment spans several
years, particularly the development of our new strategic platform
for the UK & Ireland general insurance businesses. This new
platform will provide improved processes and capacity, enabling an
enhanced experience for our customers and broker partners.
The Group continues to evolve and its Next Chapter strategy is
expected to be launched shortly. This refreshed strategy builds on
our existing strategy and will consider some exciting new
opportunities for the Group. It supports our ambitions to give even
more to those in need and will enable us to continue our support
for charities and communities in all our geographies.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Group and our
approach to managing them are outlined in our latest annual report
and in note 4 to these condensed financial statements. There has
been no change to the principal risks and uncertainties since the
year end.
Group Outlook
In the first half of the year we have seen a strong performance
in our investment result, reflecting the economic reopening seen
since the start of the year. We recognise that whilst there has
been a strong rebound there remains economic uncertainty and this
has the potential to create short-term volatility. The Group
remains well placed to withstand such potential future volatility
and continues to take a long-term view of risk. Throughout the
pandemic the Group has proven to be both operationally and
financially resilient and expects this to continue.
As restrictions in the UK gradually ease we are optimistic about
the opportunities to continue to grow and evolve our business. We
continue to invest in our people and technology, streamlining our
processes and providing a more agile and responsive service for our
customers and brokers.
Owned by a charity, Ecclesiastical is a commercial business with
a purely charitable purpose. Core to our purpose is to deliver
strong and sustainable returns to our ultimate shareholder, and to
benefit not only our customers but also the wider communities we
serve. Our third Movement for Good awards are currently underway
and we will grant a further GBP500,000 to 10 charities during the
second half of the year. We will also make a donation to our
charitable owner in the weeks ahead.
Despite the challenges we face, we will continue to pursue our
long-term charitable objective and fulfil our purpose as an
organisation committed to the greater good of society.
By order of the Board
Mark Hews
Group Chief Executive
28 September 2021
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the 6 months to 30 June 2021
30.06.21 30.06.20 31.12.20
6 months 6 months 12 months
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
Revenue
Gross written premiums 226,529 202,487 437,299
Outward reinsurance premiums (97,571) (80,313) (173,074)
Net change in provision for unearned premium 2,444 (980) (16,562)
Net earned premiums 131,402 121,194 247,663
------------ ------------ ----------
Fee and commission income 37,275 33,444 69,582
Other operating income 1,000 1,960 2,126
Net investment return 58,177 (48,859) (4,298)
Total revenue 227,854 107,739 315,073
------------ ------------ ----------
Expenses
Claims and change in insurance liabilities (151,188) (139,152) (222,794)
Reinsurance recoveries 77,711 68,104 94,581
Fees, commissions and other acquisition costs (45,211) (38,826) (85,444)
Other operating and administrative expenses (61,613) (57,319) (116,393)
Total operating expenses (180,301) (167,193) (330,050)
------------ ------------ ----------
Operating profit/(loss) 47,553 (59,454) (14,977)
Finance costs (1,090) (258) (769)
Profit/(loss) before tax 46,463 (59,712) (15,746)
Tax (expense)/credit (18,050) 8,275 526
------------ ------------ ----------
Profit/(loss) for the financial period from
continuing operations attributable to equity
holders of the Parent 28,413 (51,437) (15,220)
------------ ------------ ----------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 6 months to 30 June 2021
30.06.21 30.06.20 31.12.20
6 months 6 months 12 months
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
Profit/(loss) for the period 28,413 (51,437) (15,220)
------------ ------------ ----------
Other comprehensive expense
Items that will not be reclassified subsequently
to profit or loss:
Fair value losses on property - - (15)
Actuarial gains/(losses) on retirement benefit
plans 35,510 (15,433) (17,318)
Attributable tax (7,314) 3,100 3,521
28,196 (12,333) (13,812)
Items that may be reclassified subsequently
to profit or loss:
(Losses)/gains on currency translation differences (1,491) 2,283 1,980
Gains/(losses) on net investment hedges 1,258 (2,653) (2,339)
Attributable tax (183) 367 265
(416) (3) (94)
------------ ------------ ----------
Other comprehensive income/(expense) 27,780 (12,336) (13,906)
------------ ------------ ----------
Total comprehensive income/(expense) attributable
to equity holders of the Parent 56,193 (63,773) (29,126)
------------ ------------ ----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months to 30 June 2021
Translation
Share Share Revaluation and hedging Retained
capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2021 (Unaudited)
At 1 January 120,477 4,632 599 18,230 425,290 569,228
Profit for the period - - - - 28,413 28,413
Other net (expense)/income - - (21) (416) 28,217 27,780
--------- -------- ------------ ------------ ---------- ----------
Total comprehensive
(expense)/income - - (21) (416) 56,630 56,193
Dividends on preference
shares - - - - (4,591) (4,591)
Reserve transfers - - (313) - 313 -
At 30 June 120,477 4,632 265 17,814 477,642 620,830
--------- -------- ------------ ------------ ---------- ----------
2020 (Unaudited)
At 1 January 120,477 4,632 565 18,324 463,537 607,535
Loss for the period - - - - (51,437) (51,437)
Other net expense - - (14) (3) (12,319) (12,336)
--------- -------- ------------ ------------ ---------- ----------
Total comprehensive
expense - - (14) (3) (67,756) (63,773)
Dividends on preference
shares - - - - (4,591) (4,591)
At 30 June 120,477 4,632 551 18,321 395,190 539,171
--------- -------- ------------ ------------ ---------- ----------
2020 (Audited)
At 1 January 120,477 4,632 565 18,324 463,537 607,535
Loss for the year - - - - (15,220) (15,220)
Other net income/(expense) - - 34 (94) (13,846) (13,906)
--------- -------- ------------ ------------ ---------- ----------
Total comprehensive
income/(expense) - - 34 (94) (29,066) (29,126)
Dividends on preference
shares - - - - (9,181) (9,181)
At 31 December 120,477 4,632 599 18,230 425,290 569,228
--------- -------- ------------ ------------ ---------- ----------
The revaluation reserve represents cumulative net fair value
gains on owner-occupied property. Further details of the
translation and hedging reserve are included in note 11.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2021
30.06.21 30.06.20 31.12.20
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
Assets
Goodwill and other intangible assets 59,277 46,197 54,353
Deferred acquisition costs 42,082 39,075 41,989
Deferred tax assets 3,028 2,973 1,078
Pension assets 25,241 - 1,053
Property, plant and equipment 37,973 18,487 38,316
Investment property 146,266 143,331 142,142
Financial investments 847,561 779,619 820,777
Reinsurers' share of contract liabilities 258,464 210,079 208,677
Current tax recoverable 7,981 7,322 7,986
Other assets 252,836 226,651 216,570
Cash and cash equivalents 108,148 94,574 104,429
Total assets 1,788,857 1,568,308 1,637,370
------------ ------------ -----------
Equity
Share capital 120,477 120,477 120,477
Share premium account 4,632 4,632 4,632
Retained earnings and other reserves 495,721 414,062 444,119
Total shareholders' equity 620,830 539,171 569,228
------------ ------------ -----------
Liabilities
Insurance contract liabilities 921,131 855,630 868,649
Lease obligations 24,319 11,688 25,450
Provisions for other liabilities 9,350 7,424 6,499
Pension liabilities - 7,226 10,406
Retirement benefit obligations 6,283 6,166 6,530
Deferred tax liabilities 54,641 24,569 29,846
Current tax liabilities 104 1,005 1,293
Deferred income 26,867 24,217 25,908
Subordinated liabilities 24,981 - -
Other liabilities 100,351 91,212 93,561
Total liabilities 1,168,027 1,029,137 1,068,142
------------ ------------ -----------
Total shareholders' equity and liabilities 1,788,857 1,568,308 1,637,370
------------ ------------ -----------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months to 30 June 2021
30.06.21 30.06.20 31.12.20
6 months 6 months 12 months
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
Profit/(loss) before tax 46,463 (59,712) (15,746)
Adjustments for:
Depreciation of property, plant and equipment 3,128 2,511 5,486
Revaluation of property, plant and equipment - - (10)
Loss on disposal of property, plant and equipment 28 - 172
Amortisation of intangible assets 413 477 1,468
Net fair value (gains)/losses on financial
instruments and investment property (34,285) 54,641 18,602
Dividend and interest income (9,733) (12,080) (21,814)
Finance costs 1,090 258 769
Adjustment for pension funding 713 455 1,003
7,817 (13,450) (10,070)
Changes in operating assets and liabilities:
Net increase in insurance contract liabilities 58,895 78,161 94,180
Net increase in reinsurers' share of contract
liabilities (52,761) (45,280) (45,101)
Net increase in deferred acquisition costs (317) (152) (3,352)
Net increase in other assets (37,376) (44,557) (35,369)
Net increase in operating liabilities 9,452 7,142 16,642
Net increase in other liabilities 2,778 2,562 1,298
Cash (used)/generated by operations (11,512) (15,574) 18,228
Purchases of financial instruments and investment
property (60,478) (36,735) (121,754)
Sale of financial instruments and investment
property 62,504 76,313 151,531
Dividends received 2,929 3,940 6,255
Interest received 6,689 7,170 14,519
Tax paid (4,042) (2,076) (2,756)
Net cash (used by)/from operating activities (3,910) 33,038 66,023
------------ ------------ ----------
Cash flows from investing activities
Purchases of property, plant and equipment (3,380) (405) (6,028)
Proceeds from the sale of property, plant
and equipment 27 - 1
Acquisition of business, net of cash acquired - - (822)
Purchases of intangible assets (5,557) (7,813) (15,602)
Proceeds from the sale of intangible assets 62 - -
Net cash used by investing activities (8,848) (8,218) (22,451)
------------ ------------ ----------
Cash flows from financing activities
Interest paid (1,090) (258) (769)
Payment of principal element of lease liabilities (1,560) (1,455) (5,090)
Proceeds from issue of subordinate debt, net 25,014 - -
of expenses
Dividends paid to Company's shareholders (4,591) (4,591) (9,181)
Net cash from/(used by) financing activities 17,773 (6,304) (15,040)
------------ ------------ ----------
Net increase in cash and cash equivalents 5,015 18,516 28,532
Cash and cash equivalents at the beginning
of the period 104,429 74,775 74,775
Exchange (losses)/gains on cash and cash equivalents (1,296) 1,283 1,122
Cash and cash equivalents at the end of the
period 108,148 94,574 104,429
------------ ------------ ----------
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
1. General information and basis of preparation
Ecclesiastical Insurance Office plc (hereafter referred to as
the "Company"), a public limited company incorporated and domiciled
in England, together with its subsidiaries (collectively the
"Group") operates principally as a provider of general insurance
and in addition offers a range of financial services, with offices
in the UK & Ireland, Australia and Canada.
The annual financial statements are prepared in accordance with
International Financial Reporting Standards (IFRSs) applicable at
31 December 2020 issued by the International Accounting Standards
Board (IASB) in conformity with the requirements of the Companies
Act 2006 and pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union (EU). The condensed set of financial
statements included in the 2021 interim results has been prepared
in accordance with UK adopted IAS 34, Interim Financial
Reporting.
The information for the year ended 31 December 2020 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor
reported on those accounts: its report was unqualified, did not
draw attention to any matters by way of emphasis without qualifying
the report, and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006.
These condensed consolidated interim financial statements were
approved by the Board on 28 September 2021 and were reviewed by the
Group's statutory auditor but not audited.
The Directors have assessed the going concern status of the
Group. The Directors have considered the Group's plans and
forecasts, financial resources, investment portfolio and solvency
position. The Directors have also had consideration of the possible
challenging market conditions due to the impact of the COVID-19
pandemic on the economy, pricing and customers. The Group's
forecasts and projections, taking into account plausible scenarios,
show that the group will have adequate resources to continue
operating over a period of at least 12 months from the approval of
the condensed consolidated interim financial statements.
Accordingly, the Directors continue to adopt the going concern
basis in preparing the consolidated interim financial
statements.
2. Accounting policies
The same accounting policies and methods of computation are
followed in the consolidated interim financial statements as
applied in the Group's latest audited annual financial
statements.
The following standards were in issue but not yet effective and
have not been applied to these condensed financial statements.
IFRS 17, Insurance Contracts, was issued in May 2017 and is
effective for periods beginning on or after 1 January 2023. The
standard establishes revised principles for the recognition,
measurement, presentation and disclosure of insurance contracts.
The Group's long-term business is expected to be the most affected
by the new standard. The Group expects to be able to use the
simplified premium allocation approach to the majority of its
general business insurance contracts, which applies mainly to
short-duration contracts.
IFRS 9, Financial Instruments, which provides a new model for
the classification and measurement of financial instruments, is
effective for periods beginning on or after 1 January 2018. The
Group has taken the option available to insurers to defer the
application of IFRS 9 until the implementation of IFRS 17, which is
now on or after 1 January 2023.
The Group continues to assess the impact of the application of
both IFRS 17 and IFRS 9. As of 30 June 2021, it was not practicable
to quantify what the potential impact would be on the Group's
financial position or performance once these standards are
adopted.
Other standards in issue but not yet effective are not expected
to materially impact the Group.
3. Critical accounting estimates and judgements
In preparing these interim financial statements and applying the
Group's accounting policies, the Directors have made judgements and
estimates based on their best knowledge of current circumstances
and expectation of future events. The judgements made in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the 31 December
2020 consolidated financial statements. In 2020, the COVID-19
global pandemic had a significant impact on market conditions and
the business. Estimates and their underlying assumptions continue
to be reviewed on an ongoing basis with revisions to estimates
being recognised prospectively. There have been no significant
changes since 31 December 2020, however, as the pandemic continues,
the following areas are those where specific consideration
continues to be given:
- Valuation of insurance contract liabilities: the assumptions
used in the estimated ultimate cost of all claims incurred but not
settled include any suitable adjustments for the potential impact
of COVID-19.
- Measurement of pension liabilities: although COVID-19 has
impacted on the key assumptions in the valuation, the methodology
used to determine key actuarial assumptions has remained
consistent. A 0.6% increase in the discount rate, partially offset
by a 0.3% increase in the inflation assumption at 30 June 2021,
resulted in a net pension asset of GBP25.2m (31 December 2020: net
pension liability of GBP9.4m).
- Valuation of investment properties: the emergence of COVID-19
increased the uncertainty surrounding the valuation of properties,
leading to the valuation of investment properties to be considered
a critical accounting estimate at 31 December 2020. The carrying
value of investment properties has been updated as at 30 June 2021
and a gain of GBP3.1m (H1 2020: loss of GBP4.8m) has been
recognised.
4. Risk management
The principal risks and uncertainties, together with details of
the financial risk management objectives and policies of the Group,
are disclosed in the latest annual report.
5. Segment information
The Group segments its business activities on the basis of
differences in the products and services offered and, for general
insurance, the underwriting territory. Expenses relating to Group
management activities are included within 'Corporate costs'. This
reflects the management and internal Group reporting structure.
The activities of each operating segment are described
below.
- General business
United Kingdom and Ireland
The Group's principal general insurance business operation is in the UK, where it operates
under the Ecclesiastical and Ansvar brands. The Group also operates an Ecclesiastical branch
in the Republic of Ireland underwriting general business across the whole of Ireland.
Australia
The Group has a wholly-owned subsidiary in Australia underwriting general insurance business
under the Ansvar brand.
Canada
The Group operates a general insurance Ecclesiastical branch in Canada.
Other insurance operations
This includes the Group's internal reinsurance function and operations that are in run-off
or not reportable due to their immateriality.
- Investment management
The Group provides investment management services both internally and to third parties through
EdenTree Investment Management Limited.
- Broking and Advisory
The Group provides insurance broking through SEIB Insurance Brokers Limited and financial
advisory services through Ecclesiastical Financial Advisory Services Limited.
- Life business
Ecclesiastical Life Limited provides long-term policies to support funeral planning products.
- Corporate costs
This includes costs associated with Group management activities.
Inter-segment and inter-territory transfers or transactions are
entered into under normal commercial terms and conditions that
would also be available to unrelated third parties.
Segment revenue
The Group uses gross written premiums as the measure for
turnover of the general and life insurance business segments.
Turnover of the non-insurance segments comprises fees and
commissions earned in relation to services provided by the Group to
third parties. Segment revenues do not include net investment
return or general business fee and commission income, which are
reported within revenue in the consolidated statement of profit or
loss.
Revenue is attributed to the geographical region in which the
customer is based.
6 months ended 6 months ended
30.06.21 30.06.20
Gross Non- Gross Non-
written insurance written insurance
premiums services Total premiums services Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
General business
United Kingdom and
Ireland 142,751 - 142,751 133,735 - 133,735
Australia 49,594 - 49,594 38,263 - 38,263
Canada 32,399 - 32,399 28,255 - 28,255
Other insurance operations 1,784 - 1,784 2,225 - 2,225
Total 226,528 - 226,528 202,478 - 202,478
Life business 1 - 1 9 - 9
Investment management - 6,848 6,848 - 6,238 6,238
Broking and Advisory - 5,624 5,624 - 4,556 4,556
--------- ---------- --------- --------- ---------- ---------
Group revenue 226,529 12,472 239,001 202,487 10,794 213,281
--------- ---------- --------- --------- ---------- ---------
12 months ended
31.12.20
Gross Non-
written insurance
premiums services Total
GBP000 GBP000 GBP000
General business
United Kingdom and
Ireland 276,618 - 276,618
Australia 80,178 - 80,178
Canada 75,953 - 75,953
Other insurance operations 4,538 - 4,538
Total 437,287 - 437,287
Life business 12 - 12
Investment management - 12,382 12,382
Broking and Advisory - 9,458 9,458
--------- ---------- ---------
Group revenue 437,299 21,840 459,139
--------- ---------- ---------
Segment result
General business segment results comprise the insurance
underwriting profit or loss, investment activities and other
expenses of each underwriting territory. The Group uses the
industry standard net combined operating ratio (COR) as a measure
of underwriting efficiency. The COR expresses the total of net
claims costs, commission and underwriting expenses as a percentage
of net earned premiums. Further details on the underwriting profit
or loss and COR, which are alternative performance measures that
are not defined under IFRS, are detailed in note 16.
The life business segment result comprises the profit or loss on
insurance contracts (including return on assets backing liabilities
in the long-term fund), shareholder investment return and other
expenses.
All other segment results consist of the profit or loss before
tax measured in accordance with IFRS.
6 months ended Combined
30 June 2021 operating Insurance Investments Other Total
ratio GBP000 GBP000 GBP000 GBP000
General business
United Kingdom and Ireland 81.5% 15,349 51,179 (952) 65,576
Australia 180.5% (3,929) 104 (19) (3,844)
Canada 101.5% (446) 349 (80) (177)
Other insurance operations (8,466) - - (8,466)
---------- ------------ --------- ---------
98.1% 2,508 51,632 (1,051) 53,089
Life business 719 3,108 - 3,827
Investment management - - (1,249) (1,249)
Broking and Advisory - - 1,681 1,681
Corporate costs - - (10,885) (10,885)
Profit/(loss) before tax 3,227 54,740 (11,504) 46,463
---------- ------------ --------- ---------
6 months ended Combined
30 June 2020 operating Insurance Investments Other Total
ratio GBP000 GBP000 GBP000 GBP000
General business
United Kingdom and Ireland 96.7% 2,680 (48,701) (108) (46,129)
Australia 115.8% (2,054) (213) (16) (2,283)
Canada 99.9% 24 2,037 (91) 1,970
Other insurance operations (1,964) - - (1,964)
---------- ------------ --------- ---------
101.1% (1,314) (46,877) (215) (48,406)
Life business (233) (3,031) - (3,264)
Investment management - - (200) (200)
Broking and Advisory - - 1,373 1,373
Corporate costs - - (9,215) (9,215)
Loss before tax (1,547) (49,908) (8,257) (59,712)
---------- ------------ --------- ---------
12 months ended Combined
31 December 2020 operating Insurance Investments Other Total
ratio GBP000 GBP000 GBP000 GBP000
General business
United Kingdom and Ireland 92.5% 12,254 (12,123) (479) (348)
Australia 102.2% (620) 1,678 (31) 1,027
Canada 91.2% 4,521 3,003 (176) 7,348
Other insurance operations (4,103) - - (4,103)
---------- ------------ --------- ---------
95.1% 12,052 (7,442) (686) 3,924
Life business 468 29 - 497
Investment management - - (1,031) (1,031)
Broking and Advisory - - 2,397 2,397
Corporate costs - - (21,533) (21,533)
Profit/(loss) before tax 12,520 (7,413) (20,853) (15,746)
---------- ------------ --------- ---------
6. Tax
Income tax for the six month period is calculated at rates
representing the best estimate of the average annual effective
income tax rate expected for the full year, applied to the pre-tax
result of the six month period.
7. Preference shares
Interim dividends paid on the 8.625% Non-Cumulative Irredeemable
Preference shares amounted to GBP4.6m (H1 2020: GBP4.6m). At the
point these dividends were paid, consideration was given to the
distributable reserves and capital position.
8. Financial investments
Financial investments summarised by measurement category are as
follows:
30.06.21 30.06.20 31.12.20
GBP000 GBP000 GBP000
(Unaudited) (Unaudited) (Audited)
Financial investments at fair value through
profit or loss
Equity securities
- listed 280,270 238,225 262,598
- unlisted 68,499 47,544 59,288
Debt securities
- government bonds 165,705 152,142 160,381
- listed 330,016 331,195 334,732
- unlisted 551 270 552
Derivative financial instruments
- options 790 4,388 1,407
- forwards 628 - 672
846,459 773,764 819,630
Financial investments at fair value through
other comprehensive income
Derivative financial instruments
- forwards 475 - 401
Total financial investments at fair value 846,934 773,764 820,031
Loans and receivables
Cash held on deposit - 5,032 -
Other loans 627 823 746
Total financial investments 847,561 779,619 820,777
------------ ------------ ----------
9. Financial instruments' held at fair value disclosures
IAS 34 requires that interim financial statements include
certain of the disclosures about the fair value of financial
instruments set out in IFRS 13, Fair Value Measurement and IFRS 7,
Financial Instruments Disclosures.
The fair value measurement basis used to value those financial
assets and financial liabilities held at fair value is categorised
into a fair value hierarchy as follows:
Level 1: fair values measured using quoted prices (unadjusted)
in active markets for identical assets or liabilities. This
category includes listed equities in active markets, listed debt
securities in active markets and exchange-traded derivatives.
Level 2: fair values measured using inputs other than quoted
prices included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices). This category includes listed debt or equity
securities in a market that is not active and derivatives that are
not exchange-traded.
Level 3: fair values measured using inputs for the asset or
liability that are not based on observable market data
(unobservable inputs). This category includes unlisted debt and
equities, including investments in venture capital, and suspended
securities. Where a look-through valuation approach is applied,
underlying net asset values are sourced from the investee,
translated into the Group's functional currency and adjusted to
reflect current market conditions.
There have been no transfers between investment categories in
the current period.
Fair value measurement
at the
end of the reporting period
based on
--------------------------------
Level 1 Level Level Total
2 3
30 June 2021 GBP000 GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Financial investments
Equity securities 279,688 183 68,898 348,769
Debt securities 494,253 1,467 551 496,271
Derivative securities - 1,418 - 1,418
773,941 3,068 69,449 846,458
Financial assets at fair value through
other comprehensive income
Financial assets
Derivative securities - 475 - 475
Total financial assets at fair value 773,941 3,543 69,449 846,933
----------- --------- -------- ---------
30 June 2020
Financial assets at fair value through
profit or loss
Financial investments
Equity securities 237,620 205 47,944 285,769
Debt securities 482,307 898 402 483,607
Derivative securities - 4,388 - 4,388
----------- --------- -------- ---------
Total financial assets at fair value 719,927 5,491 48,346 773,764
----------- --------- -------- ---------
Financial liabilities at fair value
through profit or loss
Financial liabilities
Derivative securities - (3,327) - (3,327)
Financial liabilities at fair value
through other comprehensive income
Other liabilities
Derivative securities - (3,194) - (3,194)
Total financial liabilities at fair
value - (6,521) - (6,521)
----------- --------- -------- ---------
31 December 2020
Financial assets at fair value through
profit or loss
Financial investments
Equity securities 262,014 185 59,687 321,886
Debt securities 493,601 1,512 552 495,665
Derivative securities - 2,079 - 2,079
755,615 3,776 60,239 819,630
Financial assets at fair value through
other comprehensive income
Financial assets
Derivative securities - 401 - 401
----------- --------- -------- ---------
Total financial assets at fair value 755,615 4,177 60,239 820,031
----------- --------- -------- ---------
The derivative liabilities of the Group at the end of the
current period and prior year were measured at fair value through
profit or loss and categorised as level 2.
Fair value measurements in level 3 consist of financial assets,
analysed as follows:
Financial assets at fair
value
through profit or loss
-----------------------------------
Equity Debt
securities securities Total
GBP000 GBP000 GBP000
2021
At 1 January 59,688 551 60,239
Total gains/(losses) recognised in profit
or loss 9,210 - 9,210
At 30 June 68,898 551 69,449
----------- ----------- ---------
Total gains for the period included in profit
or loss for assets held at the end of the
reporting period 9,210 - 9,210
----------- ----------- ---------
2020
At 1 January 66,703 404 67,107
Total losses recognised in profit or loss (18,759) (2) (18,761)
At 30 June 47,944 402 48,346
----------- ----------- ---------
Total gains/(losses) for the period included
in profit or loss for assets held at the end
of the reporting period (18,759) (2) 18,761
----------- ----------- ---------
2020
At 1 January 66,703 404 67,107
Total (losses)/gains recognised in profit
or loss (7,015) 147 (6,868)
At 31 December 59,688 551 60,239
----------- ----------- ---------
Total (losses)/gains for the period included
in profit or loss for assets held at the end
of the reporting period (7,015) 147 (6,868)
----------- ----------- ---------
All the above gains included in profit or loss for the period
are presented in net investment return within the statement of
profit or loss.
The valuation techniques used for instruments categorised in
Levels 2 and 3 are described below.
Listed debt and equity securities not in active market (Level
2)
These financial assets are valued using third party pricing
information that is regularly reviewed and internally calibrated
based on management's knowledge of the markets.
Non exchange-traded derivative contracts (Level 2)
The Group's derivative contracts are not traded in active
markets. Foreign currency forward contracts are valued using
observable forward exchange rates corresponding to the maturity of
the contract and the contract forward rate. Over-the-counter equity
or index options and futures are valued by reference to observable
index prices.
Unlisted equity securities (Level 3)
These financial assets are valued using observable net asset
data, adjusted for unobservable inputs including comparable
price-to-book ratios based on similar listed companies, and
management's consideration of constituents as to what exit price
might be obtainable.
The valuation is sensitive to the level of underlying net
assets, the Euro exchange rate, the price-to-book ratio chosen, an
illiquidity discount and a credit rating discount applied to the
valuation to account for the risks associated with holding the
asset. If the illiquidity discount or credit rating discount
applied changes by +/-10%, the value of unlisted equity securities
could move by +/-GBP8m (H1 2020: +/-GBP5m).
Unlisted debt (Level 3)
Unlisted debt is valued using an adjusted net asset method
whereby management uses a look-through approach to the underlying
assets supporting the loan, discounted using observable market
interest rates of similar loans with similar risk, and allowing for
unobservable future transaction costs.
The valuation is most sensitive to the level of underlying net
assets, but it is also sensitive to the interest rate used for
discounting and the projected date of disposal of the asset, with
the exit costs sensitive to an expected return on capital of any
purchaser and estimated transaction costs. Reasonably likely
changes in unobservable inputs used in the valuation would not have
a significant impact on shareholders' equity or the net result.
10. Changes in estimates
The estimation of the ultimate liability arising from claims
made under general insurance business contracts is a critical
accounting estimate. There are various sources of uncertainty as to
how much the Group will ultimately pay with respect to such
contracts. There is uncertainty as to the total number of claims
made on each class of business, the amounts that such claims will
be settled for and the timing of any payments.
During the six month period, changes to claims reserve estimates
made in prior years as a result of reserve development resulted in
a net increase of GBP20.0m (H1 2020: GBP10.8m) partially offset by
a GBP7.6m decrease (H1 2020: GBP6.5m increase) in reserves due to
discount rate movements.
The estimation of the ultimate liability arising from claims
made under life insurance business contracts is also a critical
accounting estimate. Estimates are made as to the expected number
of deaths in each future year until claims have been paid on all
policies, as well as expected future real investment returns from
assets backing life insurance contracts. During the six month
period there was a GBP2.1m decrease (H1 2020: GBP4.5m increase) in
reserves due to discount rate movements.
11. Translation and hedging reserve
Translation Hedging
reserve reserve Total
GBP000 GBP000 GBP000
2021
At 1 January 15,552 2,678 18,230
Losses on currency translation differences (1,491) - (1,491)
Gains on net investment hedges - 1,258 1,258
Attributable tax - (183) (183)
At 30 June 14,061 3,753 17,814
------------ -------- --------
2020
At 1 January 13,572 4,752 18,324
Gains on currency translation differences 2,283 - 2,283
Losses on net investment hedges - (2,653) (2,653)
Attributable tax - 367 367
At 30 June 15,855 2,466 18,321
------------ -------- --------
2020
At 1 January 13,572 4,752 18,324
Gains on currency translation differences 1,980 - 1,980
Losses on net investment hedges - (2,339) (2,339)
Attributable tax - 265 265
At 31 December 15,552 2,678 18,230
------------ -------- --------
The translation reserve arises on consolidation of the Group's
foreign operations. The hedging reserve represents the cumulative
amount of gains and losses on hedging instruments in respect of net
investments in foreign operations.
12. Insurance contract liabilities and reinsurers' share of
contract liabilities
30.06.21 30.06.20 31.12.20
6 months 6 months 12 months
GBP000 GBP000 GBP000
Gross
Claims outstanding 614,960 565,121 560,992
Unearned premiums 233,808 210,916 230,800
Life business provision 72,363 79,593 76,857
Total gross insurance contract liabilities 921,131 855,630 868,649
--------- --------- ----------
Recoverable from reinsurers
Claims outstanding 173,042 135,565 129,284
Unearned premiums 85,422 74,514 79,393
Total reinsurers' share of contract liabilities 258,464 210,079 208,677
--------- --------- ----------
Net
Claims outstanding 441,918 429,556 431,708
Unearned premiums 148,386 136,402 151,407
Life business provision 72,363 79,593 76,857
Total net insurance liabilities 662,667 645,551 659,972
--------- --------- ----------
13. Subordinated debt
In February 2021 the Group raised EUR 30m in nominal amount of
Tier 2 Capital by way of a privately-placed issue of 20-year
subordinated bonds, callable after year 10. The rate of interest
until the call date is fixed at 6.3144%.
14. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation.
Charitable grants to the ultimate parent company are disclosed
in the condensed consolidated statement of changes in equity.
There have been no material related party transactions in the
period or changes thereto since the latest annual report which
require disclosure.
15. Holding company
The ultimate holding company is Allchurches Trust Limited, a
company limited by guarantee and a registered charity incorporated
in England and Wales.
16. Reconciliation of Alternative Performance Measures
The Group uses alternative performance measures (APM) in
addition to the figures which are prepared in accordance with IFRS.
The financial measures in our key financial performance data
include the combined operating ratio (COR). This measure is
commonly used in the industries we operate in and we believe it
provides useful information and enhances the understanding of our
results.
Users of the accounts should be aware that similarly titled APM
reported by other companies may be calculated differently. For that
reason, the comparability of APM across companies might be
limited.
In line with the European Securities and Markets Authority
guidelines, we provide a reconciliation of the combined operating
ratio to its most directly reconcilable line item in the financial
statements.
30.06.21
Broking
Invt. Invt. and Corporate
Insurance return mngt Advisory costs Total
-------------------
General Life
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Gross written premiums 226,528 1 - - - - 226,529
Outward reinsurance premiums (97,571) - - - - - (97,571)
Net change in provision
for unearned premiums 2,444 - - - - - 2,444
Net earned premiums [1] 131,401 1 - - - - 131,402
---------- ------- -------- -------- --------- ---------- ----------
Fee and commission income 24,803 - - 6,848 5,624 - 37,275
Other operating income 1,000 - - - - - 1,000
Net investment return - 1,528 56,276 (5) 378 - 58,177
Total revenue 157,204 1,529 56,276 6,843 6,002 - 227,854
---------- ------- -------- -------- --------- ---------- ----------
Expenses
Claims and change in insurance
liabilities (150,545) (643) - - - - (151,188)
Reinsurance recoveries 77,711 - - - - - 77,711
Fees, commissions and other
acquisition costs (45,027) - - (481) 297 - (45,211)
Other operating and administrative
expenses (36,835) (167) (1,536) (7,611) (4,579) (10,885) (61,613)
Total operating expenses (154,696) (810) (1,536) (8,092) (4,282) (10,885) (180,301)
---------- ------- -------- -------- --------- ---------- ----------
Operating profit/(loss) [2] 2,508 719 54,740 (1,249) 1,720 (10,885) 47,553
Finance costs (1,051) - - - (39) - (1,090)
---------- ------- -------- -------- --------- ---------- ----------
Profit/(loss) before tax 1,457 719 54,740 (1,249) 1,681 (10,885) 46,463
---------- ------- -------- -------- --------- ---------- ----------
Underwriting profit [2] 2,508
Combined operating ratio
( = ( [1] - [2] ) / [1]
) 98.1%
The underwriting profit of the Group is defined as the operating
profit of the general insurance business.
The Group uses the industry standard net combined operating
ratio as a measure of underwriting efficiency. The COR expresses
the total of net claims costs, commission and underwriting expenses
as a percentage of net earned premiums. It is calculated as
( [1] - [2] ) / [1].
30.06.20
Broking
Invt. Invt. and Corporate
Insurance return mngt Advisory costs Total
-------------------
General Life
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Gross written premiums 202,478 9 - - - - 202,487
Outward reinsurance premiums (80,313) - - - - - (80,313)
Net change in provision
for unearned premiums (980) - - - - - (980)
Net earned premiums [1] 121,185 9 - - - - 121,194
---------- ------- --------- -------- ------------- -------- -----------
Fee and commission income 22,650 - - 6,238 4,556 - 33,444
Other operating income 1,960 - - - - - 1,960
Net investment return - (660) (48,595) (13) 409 - (48,859)
Total revenue 145,795 (651) (48,595) 6,225 4,965 - 107,739
---------- ------- --------- -------- ------------- -------- -----------
Expenses
Claims and change in
insurance
liabilities (139,715) 563 - - - - (139,152)
Reinsurance recoveries 68,104 - - - - - 68,104
Fees, commissions and other
acquisition costs (38,448) - - (535) 157 - (38,826)
Other operating and
administrative
expenses (37,050) (145) (1,313) (5,890) (3,706) (9,215) (57,319)
Total operating expenses (147,109) 418 (1,313) (6,425) (3,549) (9,215) (167,193)
---------- ------- --------- -------- ------------- -------- -----------
Operating
(loss)/profit [2] (1,314) (233) (49,908) (200) 1,416 (9,215) (59,454)
Finance costs (215) - - - (43) - (258)
---------- ------- --------- -------- ------------- -------- -----------
(Loss)/profit before tax (1,529) (233) (49,908) (200) 1,373 (9,215) (59,712)
---------- ------- --------- -------- ------------- -------- -----------
Underwriting loss [2] (1,314)
Combined operating ratio
( = ( [1] - [2] ) / [1]
) 101.1%
31.12.20
Broking
Invt. Invt. and Corporate
Insurance return mngt Advisory costs Total
-------------------
General Life
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Gross written premiums 437,287 12 - - - - 437,299
Outward reinsurance premiums (173,074) - - - - - (173,074)
Net change in provision
for unearned premiums (16,562) - - - - - (16,562)
Net earned premiums [1] 247,651 12 - - - - 247,663
---------- ------- -------- --------- --------- ---------- ----------
Fee and commission income 47,742 - - 12,382 9,458 - 69,582
Other operating income 2,126 - - - - - 2,126
Net investment return - (484) (4,600) (25) 811 - (4,298)
Total revenue 297,519 (472) (4,600) 12,357 10,269 - 315,073
---------- ------- -------- --------- --------- ---------- ----------
Expenses
Claims and change in insurance
liabilities (224,127) 1,333 - - - - (222,794)
Reinsurance recoveries 94,581 - - - - - 94,581
Fees, commissions and other
acquisition costs (84,852) (13) - (939) 360 - (85,444)
Other operating and administrative
expenses (71,069) (380) (2,813) (12,449) (8,149) (21,533) (116,393)
Total operating expenses (285,467) 940 (2,813) (13,388) (7,789) (21,533) (330,050)
---------- ------- -------- --------- --------- ---------- ----------
Operating profit/(loss) [2] 12,052 468 (7,413) (1,031) 2,480 (21,533) (14,977)
Finance costs (686) - - - (83) - (769)
---------- ------- -------- --------- --------- ---------- ----------
Profit/(loss) before tax 11,366 468 (7,413) (1,031) 2,397 (21,533) (15,746)
---------- ------- -------- --------- --------- ---------- ----------
Underwriting profit [2] 12,052
Combined operating ratio
( = ([1] - [2]) / [1] ) 95.1%
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the consolidated interim financial statements have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
The Board of Directors is as per the latest audited annual
financial statements, with the following changes:
- Mrs Rita Bajaj was appointed as a Non-Executive Director on 15 July 2021
- Mrs Caroline Taylor resigned as a Non-Executive Director on 8 September 2021
By order of the Board,
Mark Hews David Henderson
Group Chief Executive Chairman
28 September 2021
INDEPENDENT REVIEW REPORT TO ECCLESIASTICAL INSURANCE OFFICE
PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Ecclesiastical Insurance Office plc's condensed
consolidated interim financial statements (the "interim financial
statements") in the 2021 Interim Results of Ecclesiastical
Insurance Office plc for the 6 month period ended 30 June 2021 (the
"period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the Condensed Consolidated Statement of Financial Position as at 30 June 2021;
-- the Condensed Consolidated Statement of Profit or Loss and
Condensed Consolidated Statement of Comprehensive Income for the
period then ended;
-- the Condensed Consolidated Statement of Cash Flows for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the 2021 Interim
Results of Ecclesiastical Insurance Office plc have been prepared
in accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The 2021 Interim Results, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the 2021
Interim Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the 2021 Interim Results based on our
review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the 2021 Interim
Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Bristol
28 September 2021
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END
IR KVLFLFKLXBBD
(END) Dow Jones Newswires
September 29, 2021 01:59 ET (05:59 GMT)
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