Lloyds Banking Group’s general insurance business made a profit before tax of £214m in the first half of 2011, up 10% on the £195m it made in the first half last year.
The result was boosted by a 24% reduction in claims to £198m from £261m. The company said the reduction was caused by lower unemployment claims combined with a milder freeze in January 2011 than in January 2010.
The improved result came despite a 10% reduction in operating income to £508m from £562m. This was mainly driven by the company’s decision to stop writing payment protection insurance (PPI) on 23 July 2010.
Net underwriting income from PPI fell 47% to £71m from £135m. Home insurance underwriting income, which makes up the bulk of the Lloyds GI book, was flat at £410m, while other business income more than doubled to £17m from £7m.
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