Independent is raising home insurance premiums by a minimum of 30% in flood areas, chief executive Michael Bright revealed in the 2000 results, in which the insurer posted a 42% downturn in operating profit to £40m.

The move is a response to the guarantee from the Association of British Insurers that the industry will continue to offer cover in areas prone to flooding for the next two years.

But it also reflects the poor underwriting results that saw the insurer make a £7.9m loss in personal lines, and losses of £17.2m in its international book – which it blamed on the French office.

“I am personally embarrassed by this result (France),” said Bright.

He added that the personal injury book was hit by the advent of several new claims areas from the changes in the Ogden tables, no win no fee legislation and the NHS Clawback Bill.

As a result, underwriting profit dropped to £18.4m in 2000, compared to £42.2m the year before.

Independent has now reassesed the level of its reserves for liability business and has bought two additional reinsurance protections.

But there was an improvement in commercial property, where underwriting profit rose to £21.6m, compared to £12.9m. The commercial liability profits dropped to £15.4m (£22.5m.)

Gross written premium income increased 64% during the year to £830m.