Changes to personal injury rules could boost Esure

The Sheilas’ Wheels owner, which made its £1.2 billion stock market debut in March, expects to benefit from civil justice reforms aimed at clamping down on frivolous and fraudulent claims. These changes – including a ban on upfront “referral fee” payments to individuals making personal injury claims – came into effect at the beginning of April.

Esure tightened up its underwriting between 2009 and 2011 following a surge in claims for injuries like whiplash.

As a result, the group refused business from applicants deemed most likely to raise a personal injury claim. This is assessed on as many as 13 risk factors such as the value of the car and the age and location of the applicant.

Adrian Webb, head of corporate communications for Esure, said the group could now expand into segments of the market in which it has no presence. The firm announced its shift in strategy together with its first business update since its flotation, which revealed a decent but modest 1.6 per cent rise in gross written premiums (GWP) for the three months to the end of March. GWP on the core Esure and Sheilas’ Wheels brands was 3.4 per cent higher at £120.2 million, including a 3.1 per cent rise in motor to £99.2m. Home insurance rose by 5 per cent to £21m. Total policies in force by the group, which employs about 750 people in Glasgow, grew 1.8 per cent to nearly 1.8 million. Chief executive Stuart Vann said performance was in line with expectations, while benefits of legislative changes were beginning to feed through.

“With our strong performance and robust financial position, I remain confident about the outlook for the first half and the year as a whole,” he said.