Strong competition in home and motor insurance failed to take the gloss off results from General Accident, which beat market forecasts by turning in a record £428m profit before tax last year.
The bottom-line figure, which rose from £295m in 1993, was pushed up by a particularly strong surge in business in the final quarter. GA, one of Britain's biggest composites, said it was well-placed for further progress this year, despite the fierce competition in the market and the conventional wisdom that the general insurance profits cycle is peaking.
Nelson Robertson, chief executive, said: "We're on to a good profits stream now, and we need to manage the downturn in the UK market. Obviously we can't sustain these profit increases in the UK, but that represents only 36 per cent of our business now, and the other parts of the world are improving. Even if flat profits are inevitable in the UK, progress in other areas will compensate."
GA's top management accepted that there had been downward pressure on premiums for home insurance, but said the market was more stable than motor business, where the arrival of direct insurers has squeezed margins across the industry.
Bob Scott, deputy chief executive, said: "Some people may save 10-15 per cent this year on their household premiums, but that is because insurers are differentiating between customers. Those who have poor claims records may see premiums rise, while those who are in neighbourhood watch schemes, for example, could see reductions of up to 25 per cent."
GA bucked the trend in its life insurance division, with profits of £53.3m (£49.1m) despite the downturn as a result of the pension transfers scandal and the bad publicity about endowments. Life premiums rose from £866m to £887m.
Losses from the estate agencies edged up £500,000 to £10m, but Mr Robertson said the insurance and pensions business that came through the chain made it a business worth remaining in.
The worldwide underwriting loss was reduced to £70.6m from £229m, while in Britain underwriting profit was £200m (£59.7m). The total dividend is 29p (27.5p) on earnings per share of 68.1p (50p).Reuse content