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LV= fall in premium income down to cheaper motor insurance
DORSET business LV= says cheaper motor insurance is behind a slight fall in its income from premiums.
The company, based at Poole’s County Gates, saw gross written premiums in general insurance fall from £1.49bn in 2012 to £1.45bn last year.
Income from motor insurance was down from £1.143m to £1.054m in the same period.
But the company expects to report an improved underlying operating profit compared with 2012.
Mike Rogers, LV= group CEO, said: “In general insurance, our strategy of offering competitively priced products underpinned by excellent customer service is working well and we are pleased that we continue to see renewal rates of 80 per cent on our direct motor and home products.
“Although premiums are slightly lower than 2012, this reflects a decrease in motor rates rather than in our customer base as we have actually increased our total in-force policies by over 270,000 during 2013.
“We have continued to grow our SME and home businesses both in relation to gross written premium and customer numbers and overall we expect to report an improved underwriting result for the year compared to 2012.”
Motor premiums across the industry fell in 2013, with insurers anticipating cost savings from the LASPO (Legal Aid, Sentencing and Punishment of Offenders Act) reforms to civil litigation.
Mr Rogers said: “We expect rates in motor insurance to recover during 2014 as we believe any reduction in claims as a result of the LASPO legislation may have been over-anticipated by certain segments of the market.”
LV=’s 2013 trading statement showed home insurance premiums up from £146m to £155m and commercial up from £164m to £201m.
The number of in-force policies was up from three million to 3.1 million in motor insurance and 4.1 million to 4.4 million in total.
Life and heritage premiums were down from £164m to £161m overall, with pensions up from £56m to £66m but annuities down from £60m to £46m and equity release unchanged at £9m.
Income protection premiums were down from £32m to £29m. Mr Rogers said: “In protection, our performance has been good taking into account the adverse market conditions as a result of the tax changes and gender rules.
“We continue to be the number one income protection provider of choice for independent financial advisers and during the year we launched a new direct product to appeal to those consumers who would not have previously considered protecting their income.”
Full results are to be released on March 312 and Mr Rogers said he was ‘confident that we will report good returns for our members’.
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