Personal Group

Employee benefits, insurance and consultancy concern Personal Group sees opportunities from the departure of AIG and Combined Insurance from key fields.

Pre-tax profits at the Milton Keynes-based company fell 37.5% to £5.2m last year because of a £3.4m goodwill ‘impairment’ related to the 2005 takeover of the Berkeley Morgan group. AIM-quoted Personal pushed combined insurance and other income marginally ahead to £26.8m during 2008 and increased new business in the key Personal Hospital Plan and Death Benefit business 29%, which had the perverse effect of increasing upfront costs, with the resulting profits boost coming later.

The company significantly improved its new business sales ratio and productivity last year. Net written insurance premiums rose 4.5% to £16.5m, but the claims ratio also rose, from 19.2% to 21.1%. Personal is poised to launch a refined version of its new VGIP sick pay income protection product, which had a disappointing first six months, but picked up in the second half.

New business continues robustly this year, according to the company, which argues that the departure of stricken AIG and others from significant business areas leaves it in a notably stronger position. Analysts expect profits to rally and, at 204p, down from 327.5p last May, the shares have scope for recovery over the medium term.

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