Reassured has blamed accounting errors related to commission clawback from cancelled policies as it took a £13.1m hit to its operating profits, which included swinging to a loss of almost £6m in the 2022 financial year.
The broker firm’s results for the 12-month period, originally filed on 24 October 2022 with Companies House, stated an operating profit of £5.53m with a resulting post-tax profit of £4.53m.
However its annual report and financial statements for the year ended 31 January 2023, filed on 16 November 2023, acknowledged the £11.4m commission clawback error and restates this figure as an operational loss of £5.91m with a post-tax loss of £4.55m.
It also noted a £1.7m impact on previous years which it applied to the organisation’s starting position for the 2022 financial year.
For the financial year ending 31 January 2023 Reassured reported an operating profit of £4.69m and a post-tax profit of £4.97m.
‘Unprecedented’ Covid-19 era
Reassured told Health & Protection the restatement related to trading during the “unprecedented” Covid-19 era and reflects the increased number of cancellations in 2020 and 2021.
In a statement sent to Health & Protection the broker firm said: “The restatement we made to our 2021/22 accounts relates to trading during the unprecedented Covid-19 era and reflects the increased number of cancellations in 2020 and 2021.
“Reassured subsequently reported a return to profit of £4.7m in the more recent 2022/23 accounts and enjoyed continued growth in 2023/24.”
Elaborating on the misstatements in the accounts, Reassured said: “The company has identified accounting errors relating to the clawback provision reported in period prior to 2023.
“An internal review performed post year-end identified £13.1m of adjustments impacting the headline profit before tax ended 31 January 2022 and earlier periods (£11.4m in FY22 and £1.7m for earlier periods).
“Accordingly, this has been adjusted for as at 1 February 2021 to reflect the restated position following correction of the error.”
