L&G GI profit falls 29% on weather claims

Legal & General’s (L&G) general insurance business made an operating profit of £30m in 2012, down 29% on the £42m it made in 2011.

The combined operating ratio (COR) deteriorated by five percentage points to a still-profitable 95% (2011: 90%). Accordingly, L&G’s general insurance (GI) underwriting profit dropped 37% to £17m (2011: £27m).

The company said: “Despite less than favourable weather conditions in 2012, the business delivered a healthy combined operating ratio.”

L&G noted in its results that the 2012 weather losses were consistent with its assumptions, and that 2011 was a benign year for weather.

L&G grew GI gross premium by 15% to £349m in 2012 (2011: £304m). The division benefited from 27% growth in its broker account and a 36% increase in direct sales.

L&G’s GI business writes predominantly household business, which accounted for £29m, or 96%, of its operating profit and £327m, or 94% or its gross written premium.