Aviva-owned insurer blamed lower investment income decline for the drop

Profit at insurer Gresham almost halved in 2009 but its underwriting performance improved.

The UK general insurer, which is owned by Aviva, made a pre-tax profit of £8m for the year to 31 December 2009, down 46% from the £15m it made in 2008.

The company blamed the decline on lower investment income and “other operating income”.

Gresham did not report a figure for its 2009 investment income, which was £3m in 2008. Other operating income fell 36% to £7m from £11m.

However, an improved claims experience led to more profitable underwriting, and Gresham’s combined ratio before restructuring costs fell to 100% in 2009 from 104% in 2008. The gross written claims ratio fell to 68% from 74% and the gross written expenses ratio fell to 13% from 14%.

Gresham’s gross written premium fell 8% to £247m in 2009 from £269m in 2008. The company attributed this to a tough market and its “focus on sustainable profitability rather than volume”.