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May 3 (Reuters) - British insurer esure Group Plc on Thursday said claims related to a spell of extreme winter weather resulted in higher-than-expected costs in its home insurance business in the first-quarter.
Snow storms from Siberia brought rare snow and sub-zero temperatures to much of Britain in late February and early March trapping several hundred motorists on roads in Scotland, closing thousands of schools and grounding planes.
The insurer said the disruption caused by ‘The Beast from the East’ and ‘Storm Emma’ over the period resulted in 8 million pounds ($10.88 million) of claims costs in its home insurance business, which is 6 million pounds ahead of company’s expectations.
esure joined peers Direct Line and Hastings in reporting higher claims costs in the first quarter due to icy weather.
The group’s total gross written premiums, however, rose 18 percent to 221.2 million pounds ($300.72 million) for the three months ended March 31, helped by a 21.1 percent jump in motor gross written premiums.
“Our premium and policy growth in Q1, through a strong performance in motor, is particularly pleasing as we continue with our footprint expansion programme,” the company said.
In March, Britain announced plans to introduce new laws to cut the number of whiplash claims from car accidents and change the calculation of personal injury payments, a move which would lower costs for insurers and motor premiums for drivers.
esure said competition in the market had increased following the first reading of the Civil Liability Bill on March 20.
The company, which provides insurance products to drivers, home owners, pet owners and holiday makers across Britain, added it remained on track to achieve full-year combined operating ratio similar to 2017 after adjusting for the exceptional weather costs seen in the first quarter.
esure reported a combined operating ratio of 96.7 percent in 2017.
Shares of the company were trading flat at 223.6 pence in early trading. ($1 = 0.7356 pounds) (Reporting by Radhika Rukmangadhan in Bengaluru, editing by Sinead Cruise)