Rural’s aim to be dominant force in the sector

A YORKSHIRE-BASED insurer which helps to protect thousands of farming businesses is on course to become one of the largest firms in its sector after delivering a rise in core earnings.

In a trading update, Rural Insurance revealed that it had achieved 27 per cent growth over the last financial year.

In recent years, Harrogate-based Rural Insurance has increased its market share by forging ties with dozens of brokers. It is also hiring rural underwriters, who will be “plugged into” the agricultural community.

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Rural Insurance, part of Leeds-based UK General Insurance, has introduced a number of changes to its back office system, in order to improve service standards.

Rural Insurance managing director Simon Stevens said it was “all systems go” for the specialist agricultural insurer, after trading EBITDA (earnings before interest taxation, depreciation and amortisation) grew by 45 per cent to £2.1m over the last financial year.

New business gross written premiums (GWP) also grew by 52 per cent, year on year, to £7.7m.

Mr Stevens said: “I have been running this business for two and a half years, and the last twelve months have been the best yet for Rural.

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“We have significantly outperformed our targets, in what continues to be a highly competitive marketplace.”

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 said a number of “key achievements” had helped Rural Insurance to grow. In particular, he highlighted the steps that had been taken to bring down the cost to income ratio by a further five per cent, to 47 per cent, in 2012-13.

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

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“We continue to draw from the expertise of our insurance partners and we are using them to help us develop even more sophisticated risk selection and pricing capabilities in future.

“We have hired 12 extra 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.”

Mr Stevens said he was optimistic about prospects for growth in 2013-2014.

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He added: “Following the announcement of our development underwriter strategy (which will see rural underwriters based in local offices), 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.”

Last year, Peter Hubbard, UK General Insurance’s chief executive confirmed that Rural Insurance was on track to double in size by 2015 and become a top three player in its sector. This growth is set to create jobs in Yorkshire. Speaking earlier this year, Mr Hubbard added: “Many people don’t want to work in London. We have no problems recruiting in the Leeds market. We have got almost 260 people in our offices in Leeds and Harrogate. Our headcount will expand in 2013 and 2014.

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“We’ve also got quite a number of apprentices in our business, which we think is really important for the local community and the development of the business. It’s a real win-win.”

Rural Insurance was formed in 1995 by a team of insurance professionals.

By 2008 the Rural Insurance head office in Harrogate had grown to 45 staff, with a GWP of £18m. In May 2008, Rural Insurance launched Rural Online, which offers equine, smallholders and personal accident cover,

In 2009 Rural Insurance became part of the newly formed UK General Insurance Group, which is one of the largest specialist insurers in the UK.

The UK General Group now writes more than £200m GWP, and trades with around 2,500 brokers and affinity trading partners in the UK.