Ahead of integration with LV= GI, Steve Treloar revealed how much household premium he expects the combined business to be writing by the year end

Legal & General’s GI business, bought by Allianz for £242m on Friday, made a pre-tax loss of £63.7m in 2018.

Legal & General Insurance’s combined operating ratio (COR) was 118% in 2018, as the Beast from the East weather storms and a rise in subsidence claims bit hard. 

The result is a significant deterioration in performance from 2017, when it posted a 103% COR and £10.5m profit. 

The business is set to be integrated with Allianz-owned LV= GI.


LV= GI currently has a home book of around £275m gross written premium. The annual L&G results show it increased its gross written premium to around £410m for 2018, from £369m in 2017 - the business consists largely of household policies.

Once the deal is completed by the end of the year, LV= GI chief executive Steve Treloar told Insurance Times he expects the combined business to be writing around £580-£600m.

“The deal hasn’t completed and won’t complete until the end of the year, so then we will have a better idea about how much of that business we will retain,” he said.

Steve treloar

LV= GI chief executive Steve Treloar 

But he added: “We want to grow the business so will be looking to retain as much of that as possible.”

Treloar has revealed how he hopes to turn around the L&G performance, and said the Beast from the East and a greater number of subsidence claims were issues that hit all home insurers last year.


He said increased scale was key to withstanding such extreme weather events.

“We have had Beast from the East and subsidence problems like everybody, but if you look at it over a longer term you’ll see that it’s a profitable line of business,” Treloar said. “The home market needs to make sure that it is pricing to include items such as those weather events that we see occasionally.

“A resilient and well-priced insurer will be able to manage through those shocks and by adding the home business from L&G to our existing home book we become more resilient to those types of weather shocks.”

Should it meet its £600m expectation, Treloar said it would be the fourth largest writer of home business, behind Direct Line, Lloyd’s and RSA.


Moody’s was positive about the implications of the deal, and stated that both Legal & General and the Allianz group would benefit.

Moody’s Antonello Aquino, associate managing director for insurance in EMEA, said: “Moody’s views this move as credit positive for both Allianz and L&G since it will strengthen Allianz’s presence in the UK within the P&C sector, becoming the second largest player, and will allow L&G to focus on its core life market.

“Moody’s maintains a stable outlook on the UK P&C sector as robust capital offsets profit pressure from claims inflation and possible regulatory costs.”