Home and motor policyholders with CIS are to enjoy a 'dividend' windfall in the form of a £27.6m discount on this year's renewal premiums.

The discounts follow a record year of business for the co-operative insurer as new premium income increased 24% to £73m last year. Total general insurance premiums were £374.7m.

The discounts translate into a 6% cut for CIS's 800,000 motor policyholders and 5% for its 1.7m household customers and will be issued in customer's renewal notices.

The move follows last year's freeze in home insurance premiums for the 5th successive year and only a 7.4% rise in motor premiums, compared to the market average of 20%.

The insurer claims a 93% retention rate on its motor business.

Martyn Bennett, CIS general manager for general insurance, said: "Allocating this £27.6m to discounts demonstrates the real difference that co-operative insurance offers to our customers."

He indicated that CIS's co-operative status – its only shareholder is Co-op Wholesale Services – was instrumental in it being able to return any business surplus to its customers.

Bennett added that CIS is committed to tackling problems of social exclusion as part of its social accountability programme.

A full assessment of the programme will be published with CIS's social report in May.