Storms in the UK and France have cost CGNU £285m in 2000 – far more than it had earlier been expected.
The extent of the damage was revealed as the UK's biggest insurer's general insurance operating profit fell to £412m in 2000, a drop of 10% compared to the year before. This excludes the US general insurance and London Market business which CGNU has now sold.
Pre-tax operating profit from ongoing operations reached £1.41bn for 2000, down 7.8% on the year before.
Despite the storm-related problems, this figure was at the top end of analyst expectations.
Earlier this year, CGNU had said its worldwide life and pensions sales had risen faster than expected, while overseas businesses in general had also performed well.
However, the post-tax figure was dented by a number of other items, including a £1.4bn post-tax loss on sales that included a US property and casualty business.
CGNU said it had experienced “difficult conditions” in the US market. Its decision to pull out also reflected the “requirement for substantial investment to achieve a leading market position”.
CGNU also sold off South African and German business and closed down its London Market operations during the year.
CGNU reported a post-tax loss of £1.58bn.
Chief executive Bob Scott said CGNU had now “successfully refocused” its business.
“We enter 2001 with the business reshaped, the integration process on course and the financial benefits coming through as planned.
“We are well positioned for future vigorous and profitable growth with increased shareholder returns.”
CGNU was formed from the merger of CGU and Norwich Union in May 2000.