Double digit slip as 25,000 claims paid
Lloyds Banking Group’s general insurance business experienced an 11 point slip in its combined operating ratio (COR) after it paid out on almost 25,000 claims to customers affected by storms and floods at the beginning of the year.
Its COR for the first half of the year was 80% (2013: 69%). Its gross written premium fell 9% to £604m as it focused on maintaining “a good quality risk portfolio in a competitive home market”,
Lloyds said it is the largest writer of home insurance in the UK and that it planned to increase its share of the underwritten market by bringing “a significant proportion of our annual £150m direct broked business in house”.
General insurance director Craig Thornton said: “We will be extending our first class claims service to more customers, by increasing the proportion of our direct business underwritten in-house. This will give customers greater peace of mind and strengthen our market position in general insurance, which continues to be a core part of the group.”
Lloyds reported that it had settled 95% of claims brought from the storms in January and February.
The underlying profit of Lloyds’ insurance division, which includes pensions, fell 18% to £461m (2013: £559m) because of a £100m impact from the government’s proposed fee cap on corporate pensions.
Excluding the one-off charge, the bank said “both income and profits are in line with prior year, with the benefits arising from our acquisition of attractive, higher yielding assets coupled with improved economics offsetting increased weather-related claims and lower new business income. “