Home, car, travel and pet insurer Esure (ESUR) felt the sharp end of investors feeling over its dividend cut on Tuesday with the shares falling 3.2% to 255p.
A recovery has pulled it back to 262.7p - 0.25% lower than it closed at on Monday night, but investors are still facing a 31% reduction in 2015’s total dividend to 11.5p as management retain more of the company’s cash to fund growth.
Esure has more than two million policies at the end of 2015, almost 3% more than it had 12 months earlier, while gross written premiums improved 6.3% to £550.3 million.
Yet profits fell 22.7% to £82.9 million after management decided to buy comparison website Go Compare.
One analyst has been reported as saying that the outlook statement, which includes premium growth of 10% to 15% for 2016, is below previous expectations.
Esure has met incoming European capital rules with a coverage ratio of 123%, but this was lower than expected.
