Personal Group profits climb

27th Sep 2010 10:52

Employee benefits and insurance provider Personal Group Holdings reported a 15% increase in pre-tax profit in the first half of even though the interest income on its cash pile continues to decline. In the first half of 2009 claims had been higher than normal but they have fallen back to more normal levels in the first half of this year. The ratio has declined from 25.5% to 20.2% of net premiums. That has helped the core business to report a much higher profit.Net premiums written grew from £8.52m to £9.08m and there was a small increase in other income - death benefit and voluntary group income protection products not underwritten by Personal - to £2.04m. The contribution from IFA BMG fell from £446,000 to £328,000 but that was better than expected. Interest income declined from £184,000 to £119,000. There were 11 new benefit programmes launched plus additional sales to existing customers. New business costs are steady. Sales of the voluntary group income protection product have increased since BUPA became an underwriter of the product. The balance sheet remains strong with £7.76m in the bank. There are also £7.77m of property assets. House broker Cenkos forecasts a rise in full year underlying profit from £8.6m to £9m. That is an upgrade from the previous forecast of £8.7m and appears reasonably conservative given the first half performance. Cenkos is estimating a small increase in the claims ratio in the second half. Personal anticipates paying a third dividend of 4.25p a share for the 2010 financial year. That takes the total dividend to 17p a share, up from 16.6p a share last year. At 252.5p a share, the yield is 6.7%.