New product under trial as bank focuses on accounts
Lloyds TSB's general insurance arm is to begin a major drive into the SME market and corporate partnerships this year.
Announcing the bank's full year results, Lloyds TSB managing director Phil Loney told Insurance Times that a new product for SMEs was currently under trial.
He would not comment on growth targets, but said: "SME will start from a small base, but it will grow."
AXA is understood to be developing a straight-through-processing system to support this drive.
Loney said the bank will be focusing on those opening new business accounts as well as direct sales using direct marketing and the internet.
He claimed that the bank could succeed despite the poor performance by other banks at selling insurance to businesses.
"We think there is plenty of growth in the market. We have a better record than other banks of doing banking insurance."
On corporate partnerships, Loney said the bank would be targeting retailers, smaller banks and building societies, and other insurance businesses.
"We are a broker and an underwriter and understand how to grow distribution channels," said Loney.
The drive will be focused on personal lines business.
Lloyds TSB General Insurance reported a 5% increase in pre-tax profits for 2004, rising from £140m in 2003 to £147m.
Premium income from underwritten and broked business was up 5% to £1.7bn.
On the underwriting side, earned premiums increased by £19m or 4% to £554m. Home insurance income increased by 8%. The combined ratio improved to 83.2% and the claims ratio fell to 38% from 42%.
Loney attributed this to "benign weather conditions" and the work the bank had done on improving the efficiency of the claims process.
Sales through direct channels showed growth. Gross written premiums from new policies sold direct increased by 12%. Gross written premiums for new policies sold via the internet increased by 37% year-on-year.
Loney said the bank would be looking to achieve "strong" growth in the direct channel in 2005.