DAS UK, a leading specialist legal expenses insurer, has announced that it swung to a pre-tax loss of £0.6m in the year ended 31 December, 2020, as its performance was impacted by the combined effects of Brexit and the Covid-19 pandemic.
Its GWP fell to £109m in the period, down from £115m the prior year, in part driven by the disposal of its branch in the Republic of Ireland and a Norwegian portfolio put into run-off; both actions taken in response to Brexit.
On an underlying basis, its Before the Event (BTE) portfolio grew by 4%, off-setting a contraction in the After the Event (ATE) portfolio driven by lower volumes in the Clinical Negligence sector.
In total, the financial impact of Covid-19 amounted to 5.1ppts on the 2020 COR of 100.6%. Excluding this, the underlying COR of 95.5% represents an underlying improvement of 3.7ppts on 2019.
During the period, DAS UK secured two significant new partnerships. The first was for the provision of Commercial Legal Expenses Insurance (LEI), Landlord LEI, and Landlord Home Emergency products for Simply Business, one of the UK’s largest small business and landlord insurance providers.
The company said it has also worked hard to support all customers impacted by the Covid-19 global pandemic. It has seen an increase in landlord rent guarantee claims and has reserved for an anticipated impact on employment and contract claims once the Government’s furlough scheme comes to an end.
CEO Andrew Burke said: “Firstly, let me say that I am immensely proud of DAS UK’s response to the pandemic. Our primary objective was to protect the welfare and health of our colleagues, while continuing to respond to the needs of our customers and business partners by paying claims and keeping our help and advice lines open.
“No one was furloughed and we invested in technology to enable effective remote working. The response of all of my colleagues has been terrific and I’m personally really grateful to them.”
He added: “In terms of results, the pandemic has clearly had an impact but I’m proud of the improved underlying performance and am confident we can build on that in 2021 and beyond.
“Our strategy remains to grow the business through long-term sustainable partnerships where we share a desire to improve customer outcomes, underpinned by disciplined underwriting, claims and expense management. The combined impact of Brexit and Covid-19 will clearly be felt going into 2021 but neither is a reason for us to change direction. The long term prospects remain strong.”