Churchill profits double, but RBSI combined ratio suffers
Royal Bank of Scotland Insurance (RBSI) saw a double-digit increase in total income in 2004 despite a relatively modest increase in the total policy count.
The group also confirmed it was in line to double profits at Churchill Insurance from the £86m the company was recording when acquired in 2003.
RBS Insurance chief executive Annette Court said: "We are seeing some quite healthy double-digit profit growth, not just through the acquisition of Churchill but also through growth at Direct Line.
"We said we would double Churchill's profit, at the time £86m, within three years of acquiring Churchill. We expect to achieve that position during the course of this year, so ahead of schedule."
The UK's biggest personal line insurer saw in-force policies (including motor, home, travel, pet and rescue) increase by around 4% from 20m to 20.8m. Motor polices in the UK increased by 3% or 252,000, thought to be largely down to growth in the Tesco Personal Finance motor book.
Total income from RBS Insurance increased 52% or £1,689m to £4,934m. Contribution - profit returned to the group - grew 42% or £253m to £862m. Excluding Churchill, income was up 17% (£450m) and contribution grew 13% (£73m).
The UK combined ratio slackened two-and-a-half points from 91.2% to 93.7%.
Court put the result down to the introduction of broked business into the company with the acquisition of Churchill and the deterioration of motor rates. She said: "We believe that in 2005 premiums will have to rise in order to keep up with claims inflation."