Swinton Announces Record Profits of Over £50m

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Swinton Group Ltd, the UK's leading insurance retailer, has announced eight years of consecutive growth with the publication of its 2008 year end results showing £50.1m profits from £763.9m of premium income.

We expect further growth over the next five to ten years through a combination of organic growth, both on and offline, and more acquisitions.

Swinton Group Ltd, the UK's leading insurance retailer, has announced eight years of consecutive growth with the publication of its 2008 year end results showing £50.1m profits from £763.9m of premium income.

Swinton's hugely successful 'clicks and bricks' model of building market share on the high street, combined with competitive pricing on the internet, is unique in the UK financial services sector and has contributed significantly to the impressive results.

The year end results show a 4% increase in profits recorded over the previous 12 months from £48.3m in 2007 to £50.1m in 2008.

Annual results highlights:

  • Eighth consecutive year of profit growth                    
  • Record profits: £50.1m (4% increase)                
  • EBITDA: 75.5 million (5% increase)
  • Increasing gross premiums: £763.9m (15% increase)                                                    
  • Net income: £233m (13% increase)                                                                                                
  • Policy growth: 25% increase to 3.25m policies

Swinton is now the third largest insurance retailer in the UK with 3.25m policies, and it believes the latest figures demonstrate the success of its unique model in what is a challenging sector.

While others in its sector have announced the closure of branches to become purely online retailers, Swinton has increased its overall number of shops to over 580 - up from 470 in 2007 - and is continuing to invest in the high street through both acquisition and organic growth.

Swinton secured 600 UK jobs in December 2008 in a £50m deal which saw Swinton acquire all 91 branches of IAG's (Insurance Australia Group Ltd) Equity branch network as it sought to disengage from the UK's retail insurance market. This acquisition firmly established Swinton as the only nationwide insurance retail network on the UK high street.

Swinton also made 28 acquisitions in 2008, including two major commercial brokers bringing over 90,000 new policies.

The Swinton approach of giving customers someone to speak to about car, home or other personal insurance matters has engendered significant brand loyalty among both its customer base and employees alike.

The company now employs nearly 5,000 people across the country in its shops and its UK call centres in Manchester, Halifax and Norwich and has expanded its internet activities to manage five car insurance and two home insurance brands online.

Swinton Commercial is the company's commercial arm and since its launch four years ago, has become its fastest growing division. Plans are in place to continue this growth and expand to £150m gross premium income over the next three years from the £75m achieved in 2008.

In 2008 Swinton claimed four of the highest accolades in the insurance broking industry when it was named Personal Lines Broker of the Year at both the British Insurance Awards and the Insurance Times Star Awards, the latter at which Swinton also won Commercial Lines Broker of the Year and Chief Executive Patrick Smith was named the industry's Achiever of the Year.

Current Deputy Chief Executive Peter Halpin is to take over the Chief Executive role from Patrick Smith, who is to remain on the board as Chairman.

Peter Halpin joined Swinton in 1990 and held a number of board positions including Finance Director, Operations Director and Franchise Director, before being appointed Deputy Chief Executive in 2005.

Patrick Smith, outgoing CEO of Swinton said: "I have had lots of fun at Swinton. It has been a pleasure to work with a dedicated group of professionals to build a great business in a fiercely competitive and changing marketplace. I have chosen to step down from the top job at Swinton in its 52nd year of trading and I am confident that Peter will successfully grow and develop the business in the coming years."

Peter Halpin, Swinton's new CEO, says: "The company as a whole has an ethos which sets us apart from others in the financial services sector. That ethos is one centred around a strongly-held belief that consumers appreciate having a clear and fair choice with regard to how and where they purchase their insurance. Our significant investment in both on and off-line channels will continue into 2009 and beyond and customers will always be able to pick up the phone and discuss their insurance matters with our advisers.

"I speak for the whole company when I say that we are more than delighted that Patrick has decided to stay on as Chairman. He has been a popular and charismatic leader, and will be a hard act to follow as CEO.

"Looking to the future, Swinton has been successful by going against the received wisdom that the majority of modern consumers are totally price-driven and promiscuous when it comes to their insurance renewal. Our model has shown that this is not always the case.

"Much has been said about the current tough conditions, which are certainly challenging, but Swinton has continued to demonstrate the attraction of its multi-channel proposition and to see market share grow in an ever-competitive market.

"We expect further growth over the next five to ten years through a combination of organic growth, both on and offline, and more acquisitions."

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Michael Travers
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