Britain's biggest insurer Norwich Union improved combined ratios on both commercial and personal lines in 2004.

Speaking at the launch of the 2004 preliminary results for Aviva, Bridget McIntyre, marketing and underwriting
director at Norwich Union Insurance, said that the UK personal lines combined ratio improved from 101% in 2003 to 100% in 2004 and that the commercial lines ratio improved from over 96% to 94%.

Aviva's UK general insurance business made a profit of £832m in 2004 on premiums of £5.344bn compared to £676m on £5.135bn in 2003.

McIntyre said that NU had converted more than five out of every seven Hill House Hammond policies into NU Direct policies, resulting in a 500,000 policy boost for NU Direct.

The acquisition of RAC, announced this morning, would add 400,000 policies and offer great opportunities, said McIntyre.

"RAC has 400,000 policyholders and the AA has 1.7m policyholders. There is obviously scope for growth," she said.

"The acquisition is a huge vote of confidence in the general insurance business," said McIntyre.

"There are great opportunities to sell to newly-qualified drivers through the RAC-owned British School of Motoring and the roadside business is a great boost," she added.

McIntyre said there would be 1700 job losses at RAC out of a workforce of 24,000 and there would be £80m of savings by cutting out duplication in human resources, IT and finance which would be run by NU.

The UK general insurance business returned an overall combined ratio of 97% improved from 99% in 2003. Aviva affirmed that its targets for 2005 and 2006 are 100%.

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