AXA Insurance chief executive Peter Hubbard said AXA would be increasing property rates following the flooding, with rises of as much as 10%.

He said: “Rates have been going backwards while claims inflation has been increasing. This needs to be addressed. AXA will be putting up household and commercial property rates.”

AXA estimated the cost of the July floods to be £120m. The June floods cost the insurer £78m before tax.

The insurer unveiled its interim results this week, reporting UK general insurance revenues up over 9% to £1.15bn.

The flood losses, pushed the UK general insurance combined operating ratio (COR) to 106.5% for the half year, compared to 98.6% in 2006.

The commercial and personal lines books both produced underwriting losses in the half year. The commercial book was profitable in the first half of 2006.

Hubbard said the company had achieved “material” revenue growth and had improved its underlying profitability.

Underlying general and health insurance earnings decreased to £83m from £124m.

The combined ratio deteriorated to 102.4% from 96.7% in 2006.

Excluding the impact of the major weather events, the combined ratio for the first half would have been 95.5%.

No profit for motor

AXA’s loss-making motor book saw its profitability improve in the first half of 2007. But it failed to break into the black.

The book had improved its combined operating ratio by four points and had seen its revenues increase by 54% compared to 2006.

But the book, which produced revenues of £156m, was still not profitable. “It is heading in the right direction,” said Hubbard.