DAS UK Group publishes financial results for year ending 31st December 2019

DAS UK Group (DAS UK), the UK’s leading specialist legal expenses insurer, has published its financial results for the year ending 31^st December 2019. DAS UK includes a legal expenses insurance company and a law firm (DAS Law).

2019 saw continued and strong improvement in DAS UK’s performance although the full extent of the underlying improvement was masked by a number of large losses in the large civil ATE portfolio that is in run-off. Excluding the large losses, which were £4m greater than prior year, underlying COR also remained strong.

Andrew Burke, CEO, DAS UK Group said: “In 2019, we consolidated and strengthened the underlying improvement in performance delivered in 2018 and are pleased with the results. The historic large losses in ATE were disappointing but they don’t detract from the strong performance across all our core portfolios.”

Key Performance Indicators

• Strong growth in Before The Event (BTE) portfolios largely off-set the withdrawal from the large After The Event (ATE) civil litigation segment.
• Profits have significantly improved compared to prior years, supported by the profit on the sales of the Republic of Ireland branch and a Bristol office property which, combined, amounted to £5.4m.
• The combined ratio of 99.2% is impacted by large losses related to historic cases in the ATE civil litigation portfolio.  The portfolio is in run-off and no new business was written in 2019.
• Solvency ratio strengthened to 181%, demonstrating a strong financial foundation to face into the twin headwinds of Covid-19 and a probable economic downturn.

Commenting on the outlook for 2020, Andrew Burke said: “Continued growth in BTE remains a primary focus and we expect 2020 to be a strong year in that respect. Our strategy to grow the business through long-term sustainable partnerships where we share a desire to improve customer outcomes is proving to be a resounding success. We have already won a significant amount of new business in 2020 – including Simply Business - and we have a strong pipeline of further opportunities.

“ATE is likely to be more challenging and, whilst we anticipate improved profitability in 2020, growth is less likely given the current market dynamics.

“In terms of bottom line it is still too early to accurately predict the impact of Covid-19 and subsequent economic challenges but it is clear they will be material in 2020 and most probably 2021. Beyond that, I remain very optimistic, in part because the current challenges highlight that protection afforded by legal expense insurance is more relevant than ever.

“We are also part of a strong Group and continue to enjoy the security of a healthy and stable financial position. That combination gives me confidence in our ability to face into whatever challenges come our way. The medium- to long-term future looks very bright!”

More on DAS UK’s response to Covid-19 Response and its impact to date

In terms of the Covid-19 crisis, DAS UK’s primary objective has always been to protect the welfare and health of its colleagues, particularly those who are classed as vulnerable, whilst continuing to respond to the needs of its customers and business partners in the best way possible. In particular, DAS UK has sought to support the government’s stance and advice during the crisis, balancing this with some of the specific interests of policyholders. For example:

• After an initial spike in volume, DAS UK saw the number of calls regarding redundancies drop, which does appear to support the view that the furlough scheme has been largely successful in protecting jobs thus far. However, the next few months are crucial as businesses start to re-open and business leaders re-appraise how they are able to trade under the new conditions.
• DAS UK has seen increased queries relating to landlord and tenants and anticipates an increase in calls on employment and contract disputes in the future. The extent to which it grows or develops into claims will be dependent upon the way the government and businesses navigate their way out of full lockdown.
• Phone lines have remained open throughout the crisis and during June alone DAS UK handled over 23,000 customer telephone calls. There has been a rise in NPS scores across the business; the Legal Advice team has seen historically high numbers of calls whilst delivering an NPS score of +61.
• Legal cover has never been more relevant than during the Covid-19 crisis. Teams of qualified legal advisers have also produced numerous guides for businesses, sole traders and employees, as well as for specific sectors such as landlords. DAS UK has made this information broadly available to the public via its dedicated microsite – www.das.co.uk/covid19.
• DAS UK has actively supported its people with, for example, extra support for child carers, help with working from home, and mental wellbeing programmes. It has not furloughed anybody and has put significant effort into internal communications to help everyone stay connected. These initiatives have resulted in some of the highest levels of staff engagement DAS UK has ever seen.

Andrew Burke said: “I am immensely proud of DAS UK’s response to the pandemic. Our primary objective has always been to protect the welfare and health of our colleagues, particularly those who are classed as vulnerable, whilst continuing to respond to the needs of our customers and business partners as best as we can.”