Aug. 6 (Bloomberg) -- Esure Group Plc fell the most since it went public in March after the U.K. auto insurer said premium growth is slowing amid tougher competition.
“The group now expects full-year premium growth to be lower than that achieved in the first half,” the Reigate, England-based company said in its earnings report today. The U.K. “motor market has seen an increase in price competitiveness,” which was “most noticeable during the latter part of quarter two and into quarter three,” it said.
The shares slumped 19 percent to 253 pence in London, wiping out gains since the initial public offering at 290 pence. That’s a market value of 1.1 billion pounds ($1.7 billion).
First-half pretax profit rose 15 percent to 56.9 million pounds, while gross written premiums increased 6.7 percent to 265.4 million pounds. Tougher competition drove car insurance premium rates down 7.9 percent in the second quarter, Chief Executive Officer Stuart Vann said in a telephone interview.
Esure, whose profit more than doubled last year, seeks to beat its competitors by targeting safer drivers, such as women and people over the age of 30. Lloyds Banking Group Plc, whose biggest shareholder is the U.K. government, sold a 70 percent stake in Esure, inherited through its purchase of HBOS Plc, to founder Peter Wood and Tosca Penta Investments LP in 2010.
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