30th Sep 2013 08:04
LONDON (Alliance News) - Personal Group Holdings PLC Monday said its half-year pretax profit dipped because of increased claims costs and its programme to boost investments; Chief Executive Mark Scanlon said the programme was already driving record levels of new business.
Personal Group, which sets up employee benefits systems for other companies, as well as a range of insurance products, said it made a GBP3.3 million pretax profit for the six months to June 30, compared with a GBP4.1 million pretax profit for the corresponding period the year prior.
The decline in profits was expected after the company's 2012 Annual Report said that 2013 would be a year of investment in the company, in order to boost future sales. But despite some signs that the investment programme is working, Personal Group said it expects its full-year results to be weakened by costs associated with the investment programme and by the increase in claims.
Although Personal Group's gross written premiums increased 5% to GBP11.2 million, they weren't enough to offset the 12% increase in expenses to GBP10.7 million. The rise in expenses was driven by a 32% jump in claims to GBP2.8 million.
CEO Mark Scanlon said that Personal Group's profit had also fallen on the back of its investment programme, "which is now centred on increasing sales capacity, improving our technology offering to policyholders and driving further operational efficiencies."
Scanlon said that the investment programme was behind the company's strong new business figures, which were up 20% to GBP4.9 million, and he expects them to result in profit in "later periods".
Over the period, Personal Group won significant contracts with clients such as Network Rail, Young's Seafood and Translink. The contract with Network Rail was one of Personal Group's largest ever wins. It was announced in May and launched at the start of the third quarter.
Personal Group increased its interim dividend to 9.3 pence per share, up from 8.9p.
Personal Group shares were Monday quoted at 442 pence, up 2 pence, or 0.5%.
By Samuel Agini; [email protected]; @samuelagini
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