Churchill acquisition boosts RBS Insurance income, but expenses rise
The acquisition of Churchill Insurance helped the Royal Bank of Scotland's (RBS) Insurance division to increase its income by 52%, but its expense ratio rose 34%.
RBS Insurance reported a total income of £3.2bn for the year ending 31 December 2003, from £2.1bn in 2002, but expenses increased by £148m to £582m for the year. Excluding Churchill's results, income grew by 25%, or £525m, compared with 2002.
While expenses rose by 34% in 2003, if expenses from the Churchill acquisition are excluded from the figures, expenses rose by only 9%.
Premium income also leapt 62% over the course of the year. It reached £3.1bn, compared with £1.8bn for 2002, reflecting the increased number of policies for the expanded division.
In-force motor policies increased by 3.4 million, of which 3.1 million were from Churchill, said the group.
The number of UK in-force home insurance policies increased by 3.6 million, including 3.4 million from Churchill. The number of international in-force motor policies increased by 317,000 during the year.
The combined operating ratio for RBS Insurance's UK business was 91.6%, a slight increase from the 2002 figure of 89.4%. Excluding Churchill, the UK ratio improved from 89.4% to 89.2% said the company.
An RBS spokesman said the integration of Churchill was continuing as planned, with the process expected to be completed at the end of 2005.