Insurer's first half profit stable

Groupama Insurances has reported flat profit growth in the first half of 2008.

Post-tax profits for the six months to the end of June were £15m, compared to £15.1m in the first half of 2007.

Revenues rose 4.5% to £224.7m from £214.9m in the first six months of 2007.

Groupama said the growth in revenues reflected a robust performance from the personal lines portfolio. Commercial lines and healthcare revenues remained under pressure as a result of highly competitive market conditions, the insurer added.

Personal lines business revenues were 9.5% ahead of 2007 at £123.6 m.

Commercial lines revenues eased back slightly to £54.7m in 2008, from £55.4m last year

François-Xavier Boisseau, chief executive of Groupama Insurances said :"We thought that 2008 would be a difficult year and nothing we have seen contradicts that view. Our performance has been very sound because we have the basics right and remained highly focused.

"Although we are seeing some upwards movement in pricing in our motor business it is still being outstripped by claims inflation and by the impact of credit hire. We think that the market will need to continue with price increases for some while to restore profitability.”

Boisseau said: "Again our schemes business has helped us avoid the worst excesses of the market cycle in commercial insurance. The market remains very soft - especially for liability business - and whilst there is plenty of talk about rates moving up, at the moment it is really nothing more.

“It is however pleasing to see that the uptake of e-trading in commercial business is continuing. We have been at the cutting edge of this change and are well placed to reap the benefits as acceptance grows."

He added: "Given the current position in the market cycle these are a very satisfactory set of interim results that speak for themselves and illustrate again that for Groupama Insurances, it is the bottom line and not the top that will always take precedence.”