GI chief says firm is investing “heavily” in data analysis
Investment in sophisticated data analysis helped Legal & General to deliver profitable growth in general insurance in the first half, divisional chief Mark Holweger has said.
L&G posted a net profit of £464m in H1 2013, up 15% from the £405m recorded in the corresponding period last year. Gross written premium (GWP) for general insurance rose 10% to £183m from £166m in H1 2012.
Speaking to Insurance Times after the interim results were released, director of general insurance Mark Holweger said: “It is yet another year of delivering double-digit profitability growth in our general insurance in the UK.
“We are very aware there has been benign weather this year but even beyond that, our results are particularly strong against our competitors.
“We really have got very strong discipline with regard to pricing and underwriting and we invested very heavily in sophistication in that area – data analysis and the use of that data when we are looking at trends.
“Also, we really do price for the long term. Our pricing is not just looking at today’s results, but also next year’s and the year after’s results to make sure we deliver consistent profits and growth.
“Our access to that data is very strong and it is improving all the time. We are continuing to invest in our ability to access data and analyse data in relation to the performance of our accounts.”
Key drivers
Holweger said other key drivers of L&G’s success included investing in claims management and distribution strategy, with double-digit growth recorded in broker distribution, financial intermediary distribution and direct distribution.
In the broker segment, L&G had focused on working with key strategic broker partners and had struck exclusive deals with some partners, he said. For these brokers, it had delivered “profitable growth” and provided a financially stable, brand-name alternative to the “usual suspects that they might go to”.
Household, which accounted for £172m of GWP in the first half (£156m in H1 2012), was boosted by a successful move into social housing through an exclusive deal with a broker that was launched 18 months ago.
Income protection
“We are predominantly a household-based insurer, but we also have a significant short-term income protection business, which is also growing,” said Holweger. “We are looking at broadening our product range further and that will continue over the next 12 months.”
L&G had moved into pet insurance and mid-net worth insurance this year and would be launching into motor as a distributor later this year, he said. The product would be linked to the L&G brand, but underwritten by another company.
“Our prediction for the full-year results is profitable growth,” he added. “There will be increased competition in the second half, but we will maintain profit and growth in 2013.”
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