L&G GI profit leaps to £14m

Legal and General reported it had cut its H1 general insurance income from £136, to £134m but has slashed its combined ratio from 99% to 90%, increasing its profits from £6m to $14m.

It said: “Despite the impact of the harsh freeze at the start of the year, general insurance operating profit improved to £14m (H109: £6m) resulting from a continued focus on expense and claims management, together with relatively benign weather conditions in the second quarter.

“New bancassurance distribution agreements have been signed during the period which should contribute to growth in gross written premiums over the next few years.”

H1 financial Highlights £m (2009 in brackets)

• IFRS operating profit 542 (404)
• IFRS profit/loss from ordinary activities after tax 401 (-91)
• Net cash 358 (302)

Tim Breedon, group chief executive, said: "We are successfully executing our strategy to deliver healthy returns on capital and focus on cash generation. In the first half, we have delivered £358m against our £600m net cash generation target for the year.

"The outlook for our markets in the second half of 2010 and into 2011 continues to be mixed. We are ideally placed to respond to current market and economic uncertainty and to take advantage of the significant opportunities for growth that are emerging from the changing landscape for financial services post credit crisis."