Decline as a result of 7% drop in GWP and rise in ceded premium
St Andrew’s Insurance, a general insurance division of Lloyds Banking Group, made a net profit of £106.4m for the first nine months of 2010, down 11% on the £119.5m it made in the same period of 2009.
As a result of the lower profitability, St Andrew’s shareholders’ equity fell to £296.8m from £355m.
The decline in profits was driven in part by a 7% slump in gross written premium to £462.7m in the first nine months of 2010, from £502.3m in the same period last year, but also a sharp jump in the amount of earned insurance premium St Andrew’s ceded to reinsurers. Reinsured earned premium revenue in the first three quarters of 2010 was £67.3m, up 79% on the £37.6m recorded in the same period of 2009.
On the positive side, net insurance claims incurred fell to £128.2m from £145.4m, and fees and commissions paid on insurance contracts fell to £189.7m from £214.1m.