Qmetric swings to loss

The Primary Group-owned company’s loss for the year to 31 March 2022 reversed a profit of £3.33m in the prior period.

GWP was up 22% to £215.6m.

Revenue increased year-on-year by just over £2m to £78.2m however administrative expenses were up by around £10.5m at £58.74m.

The number of home policies grew 20% in the 12 months to 890,000 which it calculated gave it a 4% market share. The group cited flexible technology and pricing systems meant it continued to be a leading player on aggregators and drove growth.

Motor

The business, which bought Sure Thing in 2019 and rebranded it as Policy Expert the following year, also grew motor policies by 51% to 171,000. It stated it was pleased with the progress in the development of pricing and product design but noted the book remains sub scale.

“With customer acquisition costs it is not yet profitable, however we are confident that the changes made in the business mix position us to scale profitably,” Qmetric reported.

While the Ebitda figure was negative, at £9.12m, a filing at Companies House showed underlying Ebitda removing extreme weather and non-recurring costs, came in at £7.33m, around half of 2021’s result.

It was made up of £19.62m profit in home and a loss of £12.29m in motor.

Delegated authority

The group gets most of its revenue from delegated authority arrangements under which it performs ‘vertically integrated’ services for the relevant insurer including product design, policy wording, marketing, sales, underwriting, pricing, policy issuance and administration, claims handling and technology services.

The household combined ratio for the year was 81.5%, almost identical to the 81.6% the year before.

Qmetric committed to reporting motor loss ratios when the product is more developed and a more material part of the group.

After the end of the financial year the business unveiled a six-year capacity deal with R&Q subsidiary Accredited Insurance for £2bn over six years.

The latest filing observed: “This is an important milestone for Qmetric and a strong signal of confidence in the business model. It provides the group with a strong and stable foundation and sufficient capacity to support our home and motor insurance ambitions for the foreseeable future.”

Staff

Headcount at the group rose to 557 from 518 previously but the increase in policy counts meant a net boost of 16% to the number of customers per member of staff at 1,904.

In the filing Qmetric reported that it had invested £6m in a six-month TV brand campaign but the board ultimately took the decision to stop spending in that area and concentrate on other brand awareness strategies.

Adding: “Other non-recurring expenses incurred in the year were due to departing executives and capacity changes.”

During the financial year founding CEO Tony Deacon retired with Sanchit Suri taking over in November 2021.

In March Suri was replaced by ex-Swiftcover founder and Axa boss Steve Hardy who had been on the board as a non-executive director since January 202

In addition, just after the end of the financial year chief financial officer Paul Gildersleeves retired after 12 years with the business. He was replaced this July by Kevin Chidwick as CFO. Chidwick has previously worked at Admiral as group CFO and at Confused as CEO.

Speculation

Over the summer Qmetric was at the centre of speculation that Primary Group would be inviting bids for the insurtech having appointed Perella Weinberg Partners to explore a potential £1bn sale.

In August Hardy told Insurance Age that the firm was aiming to double its one million customer count through further organic growth, adding new lines and potentially international expansion and acquisitions in the next five years.

He signed off in the Companies House document: “I would like to acknowledge the hard work and dedication of the staff which is imperative for the growth of the group. I am continually impressed by the results produced and we are all well positioned for future success.”

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