Esure premiums set to rise

Online insurance firm Esure has said its premiums are set to rise after an increase in small injury claims.

Shares in the firm fell more than 9% after half-year underlying pre-tax profits slid 21.3% to £46.5m.

The drop was in part due to profits in the firm’s motor insurance business falling 80.7% to £3.3m.

Chief executive Stuart Vann said, ‘The claims environment in the motor market continues to deteriorate.’

‘As a consequence we will seek to implement further rate increases in the second half of the year as we look to mitigate against these trends.’

The group has more than 1.4 million motor insurance policies and about 570,000 in home insurance.

A recent AA report showed car insurance premiums rose for the first time in three years during the second quarter of 2015, with the average cost of annual comprehensive car insurance up 5.2%.

Although Esure’s premiums are set to rise, the company’s pre-tax profits actually increased by 84% to £105.4m, but the firm said this was largely due to a gain from its acquisition of GoCompare.