Rates on the way up, says CU
Thursday 14 November 1996
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.
Liam Neeson's Downton dreams
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Friends 20th anniversary: Six things we wouldn't have without influential comedy series
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...