Rural Insurance delivers rise in core earnings

Rural Insurance today revealed that it had achieved 27 per cent growth over the last financial year.

Rural managing director Simon Stevens said it was “all systems go” for the Harrogate-based insurer, after trading EBITDA (earnings before interest taxation, depreciation and amortisation) grew by 45 per cent to £2.1m.

“I have been running this business for two and a half years but the last twelve months have been the best yet for Rural. We have significantly outperformed our targets in what continues to be a highly competitive marketplace,” he said.

He added: ”On the back of such a successful year, our intention now is to think creatively about the future strategy for Rural and its continuing role as one of the jewels within the UK General Insurance Group.”

Mr Stevens pointed to a number of key achievements that have driven Rural’s outperformance, in particular bringing down the cost to income ratio by a further five per cent to 47 per cent in 2012-13 through the introduction of a range of new back office processes designed to improve service delivery to its customers.

Mr Stevens said: “Our partners have responded magnificently: we have extended our partnership with Purple network for a further three years and experienced a 25 per cent growth in premium delivered from Broker Network members.”

“We continue to draw from the expertise of our insurance partners and are using them to help us develop even more sophisticated risk selection and pricing capabilities in future. We have hired 12 additional staff during the year to manage our growth, creating a 50-strong team. I am pleased to say that we have drawn most of these individuals from the local community, and we will develop and train them in-house.”

Looking ahead, Mr Stevens said he was optimistic about prospects for growth in 2013-2014: He added: “Following the announcement of our development underwriter strategy (Rural underwriters based in local office), we continue to actively recruit individuals for these roles to support our key brokers.”

He said: “We expect competitive market conditions to continue across all product lines. Although we managed to maintain five per cent renewal premium increases for most of last year, commercial motor prices remain flat although there were some encouraging signs of some rate hardening in certain niches during the spring. The outlook for the business remains positive and we continue to plan further growth over the next 12 months.”

Founded in 1995, Rural Insurance is part of the UK General Insurance Group. Headquartered in Harrogate, Rural products are designed to protect the assets and insure the liabilities of agricultural and rural businesses, as well as reducing their exposure to risk.