Group chief executive Rogers expects motor rates to recover this year
LV= wrote general insurance gross premium of £1.45bn in 2013, down 2.7% on the £1.49bn it wrote in 2012.
This was despite a 7.3% increase in in-force policies to 4.4 million from 4.1 million, the insurer said in a trading statement.
LV= group chief executive Mike Rogers said: “Although premiums are slightly lower than 2012, this reflects a decrease in motor rates rather than in our customer base as we have actually increased our total in-force policies by over 270,000 during 2013.”
However, Rogers added that motor rates are set to improve. He said: “We expect rates in motor insurance to recover during 2014 as we believe any reduction in claims as a result of the Laspo [Legal Aid Sentencing and Punishing of Offenders Act] legislation may have been over-anticipated by certain segments of the market.”
Motor was the only line of LV=’s general insurance business to suffer a decline in gross written premium (GWP) in 2013 compared with 2012.
The insurer’s motor GWP fell 7.8% to £1.05bn from £1.14bn, despite an increase in in-force motor policies to 3.1 million from 3 million.
Home GWP was up 6.1% to £155m (2012: £146m), commercial GWP increased 22.6% to £201m (2012: £164m) and collective GWP for other lines rose 9.4% to £35m (2012: £32m).
Commenting on LV=’s overall general insurance performance, Rogers said: “Our strategy of offering competitively priced products underpinned by excellent customer service is working well and we are pleased that we continue to see renewal rates of 80% on our direct motor and home products.”
He added: “We have continued to grow our SME and home businesses both in relation to GWP and customer numbers and overall we expect to report an improved underwriting result for the year compared with 2012.”