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Homeserve confident of progress despite increasing competition

Emergency heating and plumbing service company HomeServe has predicted it will hit growth targets when it announces interim results in November despite increasing competition in the UK market.

In a trading statement for the six months up to 30 September this year the company said: “We anticipate first half results ahead of last year and in line with our expectations.

“The current market conditions are not having a material impact on our consumer facing membership businesses, with renewals and marketing take up rates for utility branded policies are in line with our targets.”

On the UK emergency services market the statement said: “The insurance-driven emergency repair market remains challenging with a reduction in underlying claims volumes and increased price competition.

“At the same time we have continued to drive margin improvements through being more selective in the type of work we take on, improving our working relationships with subcontractors, driving procurement efficiencies and tight management of overheads. We are continuing to make progress in securing our second hub deal.”

The statement said gross new policy sales had increased by 18 per cent to 700,000 and policy retention rates were 84 per cent.

The statement said: “Our objective is to maintain this retention rate through the second half of the year. Following successful operational testing of 'One Contact', our new 'Pay on Use' proposition aimed at non-insurance minded homeowners, we will commence a regional pilot in the Midlands on October 1.”

On future expectations the statement said: “HomeServe has made good progress in the first half. As in prior years, trading will be weighted to the second half of the year, which is the busiest period for marketing activity and emergency repairs. This year we will see an increased weighting toward the second half due to the run-off of our reinsurance captive over the last twelve months and the phasing of our new and enhanced underwriting agreement.

“The financial year continues to develop in line with our expectations, and our outlook for the full year remains unchanged.”

The statement added that international business was progressing well: “In France, Domeo continues to grow well and retention rates remain high.

'In October, we commence test marketing our range of plumbing products with a major French household insurance partner. In Spain, Reparalia is now fully integrated within the business and we commence marketing with Endesa in October.

“In the United States, we are encouraged by the highly successful marketing campaigns with California and Louisville Water and retention rates are also performing well.

'During the summer, we have developed the pipeline of potential new partner relationships and been successful in progressing several proposals to the advanced negotiation stage.”

HomeServe chief executive and founder Richard Harpin is pictured above.