Floods flooding in Yorkshire

Lloyds Banking Group’s general insurance business experienced a 16 percentage point deterioration to 89% in its combined operating ratio (COR) in the first half of 2016 (2015: 73%), partly driven by adverse weather in the first half of 2016.

The bank said it helped more than 14,000 home customers who were impacted by the storms and floods.

Gross written premium also fell by 1% decrease to £555m compared to £561m the same period last year.

The drop in premiums was driven by the competitive home market and the run off of legacy products.

However the bank said this decrease was partly offset by continued growth in in the motor business.

To help grow its home business in June Lloyds said it launched a flexible online home insurance offering which allows customers to tailor policies to their individual needs.

The bank’s general insurance business covers homes, belongings, cars and businesses for more than three million customers.

The rest of the insurance division comprises money protection, pension and investment products.

Overall the company’s insurance division saw a 24% decrease to £446m in the underlying profit for the whole insurance division, with increased new business income driven by the bulk transactions.

However, this was more than offset by adverse economics and weather related claims.

Costs also increased by 7% to £395m reflecting significant investment spend and a £29 million levy associated with the Flood Re scheme.

Lloyds Bank said the estimated Solvency II ratio of 144% represents the shareholder view of Solvency II surplus, and is aligned to the way in which capital is managed within the Insurance division

On 1 January 2016 the post dividend position was 151%.

Lloyds said the reduction in the ratio primarily reflected adverse market volatility following the EU referendum and the capital invested in our successful external bulk annuity business.