Royal Bank of Scotland Insurance's combined ratio climbed four points higher to 92.7% for the first six months of 2004, according to the company's interim results.
A company statement said: "The UK combined ratio, which includes manufacturing costs, was 92.7% compared with 91.2% for the full year 2003. Excluding Churchill, the UK ratio improved from 89.1% for the first half of 2003 to 89%."
Royal Bank of Scotland's half-yearly figures showed the effect of the integration of Churchill, as the bank's insurance division said its expenses increased by 58%, or £111m, to £301m. The figures also recorded huge increases in both premium income, up 105% to £2.4bn, and net claims, up 106% to £1.7bn, as the Churchill and Direct Line figures were amalgamated.
Contribution of RBS Insurance was boosted by 55%, or £140m, to £395m over the first six months.
Group chief executive Fred Goodwin said: "As a result of organic growth in Direct line and the acquisition of Churchill, RBS Insurance increased the numbers of its in-force motor and home insurance policies, which both grew by 3.5 million since June 2003.
"Excluding Churchill, which was acquired in September, RBS Insurance increased its income by 17% and its contribution by 13%"
Overall the market reacted poorly to RBS Group figures, at one point losing 63p, or 4%, on the day's trading (Tuesday). This was despite the bank announcing a 17% increase in profits to £3.4bn, in line with expectations. A market analyst said: "I think a 4% drop is a pretty significant suggestion of low appreciation rather than low confidence. You have to beat expectations to get an upgrade."
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
