The legal expenses market continues to experience challenges, particularly since the Legal Aid, Sentencing and Punishment of Offenders Act (LASPOA) in 2013. Despite this, the Company has continued to perform satisfactorily and has successfully consolidated its position as a leading player in the market. It has achieved this by adopting a policy of continuously listening to customers and partners and adapting and innovating to ensure that it remains at the forefront of providing access to justice for all.

Market conditions in 2017 showed a clear steer towards a new post-LASPOA environment with increased need to provide better value to customers in both the Before (BTE) and After (ATE) the event sectors. The Company is performing successfully in both areas and well positioned to grow a balanced book of business going forward.

Financial Info

Strong consistent growth continued in BTE business, especially for commercial legal protection aimed at SME's channelled through sources in London and the South-East. The Company welcomed the changes to Employment Tribunal fees in 2017 though anticipates there may be an impact on increasing claims frequencies in the future. Meanwhile, home emergency assistance business has remained a challenging class to underwrite, though measures are firmly in place to improve its performance going forward.

ATE business continues to have a mixed result. Sales were deliberately limited to control the exposure to clinical negligence risks which continue to face premium challenges from the paying losing defendants. Such matters are not expected to be fully resolved until 2019. Furthermore, competitive market conditions have seen a general reduction of approximately 15% of all ATE policies, reflecting the difficult post-LASPOA trading conditions of many personal injury law firms.

Financial Info3

The ever-changing legal landscape remains uppermost in the Company's planning projections. The Civil Liability and Litigation Bills in England & Wales and Scotland respectively are expected to shift the Company's focus towards more BTE solutions to satisfy the likely changes in customer's demands. Clinical negligence ATE business is expected to continue largely unchanged even if new fixed recoverable costs are introduced in low value cases. The Company remains open to adjusting to these potential reforms along with the general economic and regulatory uncertainty attaching to Brexit.

The final results for 2017 exceeded shareholders expectations with earned income rising from £12.2m to £12.3m (plan £12.2m) and net operating profits amounting to £1.2m against a plan of £1.0m. Furthermore, solvency remains very adequately covered.

Costs and expenditure continue to be kept under control, mostly by keeping personnel costs within budget. This has been achieved without sacrificing any legal and regulatory obligations that the Company may have with many stakeholders. The Company remains resolute in ensuring that each customer is treated fairly.

The Company has an impressive market presence as recognised by retaining the best BTE Underwriting Service Award for the 5th consecutive year and Managing General Agent Team of the Year Award for the 3rd consecutive year as voted by industry experts. In addition, the Company was shortlisted for numerous awards and maintained "outstanding" status in the Best Companies survey along with being ranked in the top 20 Companies in the South-West. All of this has been achieved by loyal and supportive brokers, agents, insurers, solicitors and suppliers who have all been served by a dedicated and motivated workforce.