Insurance group Britannic has increased its pre-tax operating profits by 12% to £152.4 million and plans to grow its general insurance business further by teaming up with Allianz Cornhill.

Britannic has struck an affinity deal with Cornhill's direct arm to sell motor and home insurance to Britannic's 1.5 million customers from April.

Britannic has an existing base of 130,000 household policyholders but many of its motor policyholders transferred to insurer Avon when Britannic stopped writing renewal business three years ago.

A spokesman for Cornhill said: "Britannic is seeking our help to expand its general insurance account by selling motor and home insurance to its 1.5m customers."

This fits with Britannic's strategy of diversifying its product range of life and long-term savings to become a broader based financial services group. Profits from the group's general insurance business more than doubled to £2.6m in 1999 (£0.9m 1998). The insurer said this was due to tight management and the impact of reserve releases from its motor book.

However, gross written premiums for general insurance fell by £1.4m to £13.2m in 1999 (£14.6m 1998).

The insurer has also invested in IT systems to ensure it can accommodate transactions from other distribution channels including the internet, interactive television and wireless telephone services or WAP mobile phones.

Britannic chairman Harold Cottam said: "The expansion of new distribution channels and the enhancement of our product range offer excellent new opportunities. We now provide a much greater product choice for our existing customers, attract new customers to increase the scale of our operations while defending and delivering good margins."

Britannic has embarked on a programme of building its brand name through television advertising and sponsorship. It is backing Arctic explorer David Hempleman-Adams' attempt to fly across the Arctic Ocean in an open basket balloon. Britannic is specifically using the balloon flight to raise awareness of its internet site, britannic.co.uk