Das UK posts profit rise for 2019

Das UK Group has posted rising profits for the year ended 31 December 2019.

The specialist legal expenses provider revealed a statutory profit of £1.6m in 2019, up from a statutory loss of £10.0m in the preceding year.

In addition, post-tax profit gross of Ergo (Das’s parent company) quota share grew to £11.3m, compared to £2.3m in 2018.

However, its combined operating ratio deteriorated to 99.2% in 2019 (2018: 95.4%) and gross written premium fell slightly to £115m from £118m in 2018.

Das UK comprises its legal expenses insurance company as well as law firm Das Law.

In a statement, the provider noted that the “full extent of the underlying improvement” had been masked by a number of large losses in its large civil after the event (ATE) portfolio which is in run-off.

It detailed that the large losses from this portfolio were £4m greater than in 2018.

Improvement
Andrew Burke, CEO, Das UK Group, commented: “In 2019, we consolidated and strengthened the underlying improvement in performance delivered in 2018 and are pleased with the results.

“The historic large losses in ATE were disappointing but they don’t detract from the strong performance across all our core portfolios.”

The business further noted that it had seen “strong growth” in its before the event (BTE) portfolios in 2019.

It added that the increase in profit was supported by the sales of its Republic of Ireland business to Arag Group and a Bristol property, which combined amounted to £5.4m.

Focus
Commenting on the outlook for 2020, Burke said: “Continued growth in BTE remains a primary focus and we expect 2020 to be a strong year in that respect.

“Our strategy to grow the business through long-term sustainable partnerships where we share a desire to improve customer outcomes is proving to be a resounding success.

“We have already won a significant amount of new business in 2020 – including Simply Business - and we have a strong pipeline of further opportunities.”

Burke added that ATE is likely to be more challenging with growth less likely due to “current market dynamics”.

He continued: “In terms of bottom line it is still too early to accurately predict the impact of Covid-19 and subsequent economic challenges but it is clear they will be material in 2020 and most probably 2021.

“Beyond that, I remain very optimistic, in part because the current challenges highlight that protection afforded by legal expense insurance is more relevant than ever. We are also part of a strong Group and continue to enjoy the security of a healthy and stable financial position.

“That combination gives me confidence in our ability to face into whatever challenges come our way. The medium- to long-term future looks very bright!”

Pandemic
Looking at Das’s response to Covid-19, the business stated that it had not furloughed anybody and has put “significant effort” into internal communications to help everyone stay connected.

It noted that these initiatives had resulted in some of the highest levels of staff engagement Das UK has ever seen.

Burke concluded: “I am immensely proud of Das UK’s response to the pandemic. Our primary objective has always been to protect the welfare and health of our colleagues, particularly those who are classed as vulnerable, whilst continuing to respond to the needs of our customers and business partners as best as we can.”

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