Multi-million pound promotional drive to counter poor performance

The AA will increase its brand awareness to boost the poor performance of its motor book.

The AA saw a reduction in gross sales from £442m in 2002 to £437m for the year ended 31 December 2003.

Its motor policyholders fell by 1% from 959,000 to 952,000 in 2003.

But it had more success from its home business, as customers rose by 4.4% to 693,000 for 2003.

Neither the AA nor Centrica would comment on why sales fell.

To elevate its profile, the AA said it had set aside a multi-million pound budget for marketing and advertising for 2004. The campaign includes television advertising that began in February, and which will run till the end of the year, and a direct mail promotion.

The AA also overhauled its website in April to improve navigation. It said that online inquiries had since improved.

The company said that it had increased its panel of insurers by adding Co-op Insurance Services and Link. Going forward it said it would increase the panel further and focus on growing and developing core products.

Its results also show that turnover increased slightly from £135.6m in 2002 to £137.4m in 2003. Pre-tax profits, meanwhile, rose from £19.9m in 2002 to £21.5m in 2003.