Rates on the way up, says CU

Commercial Union yesterday added its voice to those suggesting UK insurance rates were set to turn up. Peter Foster, finance director, said they had yet to push through any rating increases, but had not reduced rates by as much as other insurers when prices were falling. The next move from CU on rates would probably be upward, he forecast.

The group is also sanguine about the effects of the announcement on Tuesday that AXA and UAP of France are to merge to create the world's second-biggest insurance group. Tony Wyand, director in charge of European operations, said: "We see [the union] in a fairly positive light." AXA would help make the market more focused on shareholder return, which would benefit Commercial Union, he said.

The comments came as the life and general insurer announced that operating profits had slid from pounds 384m to pounds 348m in the nine months to September. The figures continued to be dragged lower by weather-related claims from the first half, which rose by pounds 62m and more than offset stronger results from the life insurance business.

UK profits slumped from pounds 244m to pounds 161m in the period. First-quarter winter storms and claims from terrorist bombings compounded domestic problems caused by competition. CU had to fork out pounds 17m in weather claims, pounds 7m following the IRA bombing in Manchester's city centre and pounds 2m for the bomb in London's Docklands.

General insurance premium income fell 2 per cent, but there are now glimmers of hope in the UK. CU said: "The rating environment remains competitive, although there are signs of competition reducing in the motor classes."

Life profit rose 11 per cent to pounds 178m, boosted by CU's French operations and a reorganised Dutch business. Life premiums climbed 6.4 per cent to pounds 2.8bn, with Poland more than doubling its premium income and Italy posting a 37.5 per cent increase. Insurance premiums from the life business now provide 43 per cent of the group's total premium income.

"The results show the virtue of having a good spread of businesses," said Trevor May, an analyst at Salomon Brothers. "In the UK, the premium income line is still weak. They're deliberately losing exposure and becoming an increasingly smaller operation."

The shares rose 6p to 645p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there