Swinton profits down to £11.5m as 60th year is one of change

Swinton Group – the insurance broker founded in Manchester 60 years ago – has seen turnover and profits fall as changes in consumer behaviour have forced it to change its model and invest in digital.

The company, which has seen 90% of its consumers migrate to renewing their insurance policy online or over the phone,  says it made substantial progress in improving and modernising its business last year, leading to a pre-tax profit of £11.5m (2015: £15.9m) on turnover of £222.8m (2015: £265.4m) to the end of December 2016. Operating profit stood at £14.9m (£21.1m).

The company is investing more than £45m in upgrading its IT and digital capabilities and in May it relocated its back office and some customer-facing teams to its new Manchester city centre head office and contact centre at 101 Embankment.

But the ongoing changes have also meant job cuts and in April this year the company announced that it was to axe around a third of its 3,000-strong workforce, putting 84 of its 194 high street branches under review, as well as a call centre in Norwich.

Swinton says profit figures were affected by restructuring costs of £10.7m as well as one-off charges such as an £8.3m charge to reflect the reduction in value of legacy IT systems. But it did also gain £6.6m on the sale of Open & Direct, its Northern Ireland business.

Gilles Normand, chief executive of Swinton, said: “Although conditions in the general insurance market remain challenging, we continue to make substantial investments to modernise and improve our business, thereby making it easier for customers to interact with us.”

He added that 2017 has seen further investment in the digital platform and improvements to the product range and pricing through closer relationships with insurer partners.

“We are building a solid platform for the future in order to address the challenges that we and the wider insurance broker community face. Our current trading is in line with expectations and we would like to thank our colleagues for their continued hard work and contribution throughout the year,” he said.

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