Qmetric reveals £41m loss in run-up to sale

A filing at Companies House for Qmetric Group Holdings showed the deficit in the year to 31 March 2023 ballooned from £9.99m the year before.

As previously revealed by Insurance Age, ADIA bought a majority stake from Primary Group in November having already been a minority investor.

Qmetric received the £35m injection from its new parent in the form of equity investment in shares on 28 November, the document detailed.

Results

The business acknowledged high levels of inflation hitting claims costs in motor and home insurance during the financial year, along with cold weather in December 2022 affecting the home book.

The household combined ratio deteriorated from 82% to 94%.

However, the directors argued that its home insurance “continued to outperform the market substantially”.

Gross written premium across the company rose 31% year-on-year to £282.8m, but revenue fell by 1% to £77.2m.

Policies

The number of home policies soared by a quarter breaking through the 1m barrier for the first time to more than 1.11m as live motor policies jumped 36% to 233,000.

The household claims ratio was relatively stable, ticking up two percentage points to 45%.

The directors said: “The loss ratio performance leverages a combination of great claims customer experience and strong risk selection and pricing.”

They accepted that the motor book remained sub-scale after a difficult year and forecast it would not grow significantly, focusing instead on profitable business.

They added: “The group has continued to invest in its capacity and capability to deliver its growth ambitions and this, combined with inflation and higher sales volumes has resulted in a 10% increase in underlying expense ratio in 2022/23 compared to the prior year.”

Capacity

During the financial year, in June 2022, Qmetric began underwriting policies under a six-year £2bn capacity deal with Accredited Insurance (Europe).

The filing added: “The partnership has developed well and provides the group with a strong, stable foundation and sufficient capacity to support our home and motor insurance ambitions for the foreseeable future.”

The operating loss of £52.1m was mainly made up of £19.6m in home and £30.9m in motor.

Headcount in the period increased by 93 people to 650 staff.

Structure

A spokesperson for Policy Expert told Insurance Age: “The difficulties faced by the insurance industry have been widely reported and, while Policy Expert has faced the same challenges, the structure of our business means we are well placed to confront these issues. 

“Despite winter storms last year, our home insurance business continued to deliver strongly, growing policies in force by 25% as well as a market leading loss ratio. 

"This is made possible by the fact that we own all aspects of the claims servicing process, allowing us to solve claims quicker, and pass savings onto policyholders.

“Our car insurance business has faced the same inflationary pressure as the rest of the market, and we have continued to grow our book in the face of this.”

Growth

The spokesperson concluded: “At the same time, we have significantly invested in the business, appointing a new senior management team, signing a new capacity agreement with Accredited giving us long term certainty and capacity for growth, and recently welcoming new owners ADIA, giving us further capacity for growth.”

Last December Policy Expert CEO Steve Hardy confirmed the business was eyeing accelerated growth after ADIA took its majority stake highlighting that the backer was well placed to support it going forward.

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