Storm damage claims blew a £17m hole in Legal & General's (L&G) general insurance account, reducing the division's bottom line profits to £20m (£25m in 1999), according to the company's results for 2000.
However, total pre-tax profits for the pensions to insurance group increased by 15% in 2000, to £479m (£418m).
Chief executive David Prosser hopes L&G's recent insurance partnerships agreed with Barclays and Alliance & Leicester will increase growth in terms of market share. This is in addition to its existing partnership with the Woolwich, now owned by Barclays, for household insurance.
He said: “We expect the agreements with Barclays and Alliance & Leicester to increase our UK individual equivalent premium income by a third in the first full year of operation. We are building on our existing business with leading banks and mortgage lenders and there is more to come.”
The company's household account remains the backbone of L&G's general insurance business and produced a profit of £5m, despite the adverse weather claims of last year.
Premiums also grew strongly for L&G's healthcare and income protection business, turning last year's £1m loss into a profit of £1m.
In addition, motor insurance profits grew by £1m, compared to a loss of £1m in 1999.
L&G also realised a £21m profit (£20m in 1999) on its mortgage indemnity guarantee business, even though the company set aside £9m for the legacy of the early 1990s housing slump.