Esure hopes to benefit from insurance rule change  

Photo of Shelias' Wheels advert
Esure owns Shelias' Wheels, the car insurance firm 'designed specifically with women in mind'

The chief executive of Esure has said that the insurer is "extremely well placed" following a recent injury compensation rule change in the UK, with the firm's shares soaring on the back of its 2016 results. 

As many UK insurers see their profits battered by the change in the so-called Ogden rate, which determines the amount paid out to victims with severe injuries, Esure posted a pre-tax profit boost of 19pc to £72.7m for the year to December. 

Shares in Esure - which also owns the Sheila's Wheels brand - slumped when the Ministry of Justice announced its move to cut the rate, but soared more than 8pc on the day of its results. 

Chief executive Stuart Vann, who described the firm's current situation as "extremely" positive, said that the insurer's "low-risk approach to underwriting and conservative reinsurance programme" had reduced its exposure to the change, putting it in a strong position compared to other UK insurers.  

Pre-tax profits at Admiral, for example, fell 25pc for the year, while Direct Line reported a 30pc fall in profits. Both would have seen profits rise without the change. 

Mr Vann described the year, which saw eSure split from its price comparison site GoCompare, as "fantastic", adding that the UK's decision to leave the EU had no impact on the group and that the rationale to demerge from GoCompare was "exactly right."  

The group's full year dividend rose 17pc to 13.5p. 

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