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
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...