Without the Beast from the East, L&G’s GI business would have posted strong profit growth
The Beast from the East pushed Legal & General’s general insurance business into loss in the first half of the year.
Without the bad weather losses, the business would have registered a sharp increase in operating profit, the company reported.
The operating loss for the first half was £6m, compared with a £15m profit a year earlier. But without the February freeze, operating profit would have been £22m.
Combined operating ratio for the first half was 107%, compared with 95% a year ago. But excluding the weather losses, the COR improved to 92%.
Gross written premiums rose 12% to £193m (H1 2017: £173m). This included £12m from the group’s pet insurance business, a 65% increase compared to H1 2017.
The Buddies business, which was acquired in January 2018, is now operating as an integral part of the General Insurance division, the company said.
Direct business delivered gross premiums of £71m in H1 2018, representing 12% growth on H1 2017 and now accounts for 37% of gross premiums (H1 2017: £63m, 36% of gross premiums).
L&G said its GI business has had eight distribution agreements with major UK financial institutions go live since 2016, two of which went live in the first half of this year.
The distribution agreement with The Co-operative Bank went into effect in May 2018 and the agreement with Pen Underwriting went into effect in April 2018.
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