Corporate News
2010 Year End Results announcement
Strong performance despite extreme weather conditions
- Net written premiums of £7.5bn up 11%
- Combined operating ratio (COR) of 96.4%, includes 3.5 points of weather losses worse than normal levels
- Operating result of £636m
- IGD surplus of £1.5bn, representing coverage of 2.3x
- Final dividend up 7% to 5.70p, giving a full year dividend increase of 7%
- Driven profitable top line growth in all regions due to rate, targeted volume increases and acquisitions
- Emerging Markets beats £1bn net written premium target
- Indian associate continues to grow strongly, with NWP up by 35% to £116m
- Acquisitions in Canada, Ireland, Sweden, Denmark and Oman and Tesco affinity in UK operational from October
- Completed UK cost reduction programme generating £70m of annualised savings
- Portfolio of high performing businesses with strong market positions and exciting potential
- Deliver targeted growth and a much improved underwriting result in the UK in 2011
- International 2011 NWP growth to be around 10% with continued strong profitability
- Emerging Markets to drive double digit growth in 2011
- Combined operating ratio for 2011 expected to be better than 95%
- Emerging Markets NWP to double to around £2.2bn by the end of 2015
- International and Emerging Markets to represent around 70% of premiums in the next five years
"This is a strong top line and robust underwriting performance in what has been an extremely tough year for the industry and to deliver a combined ratio of 96.4% in these conditions underlines the strength and resilience of the Group. We go into 2011 with confidence and despite challenging market conditions, expect to deliver targeted growth in the UK, around 10% in International and double digit growth in Emerging Markets. As it stands today and assuming a return to more normal levels of weather losses, we also expect to deliver a combined for the Group of better than 95%. Our strategy of targeted growth in the UK while realising the strong growth opportunities in International and Emerging Markets will result in a further shift of the business towards these regions. Our target is to double Emerging Markets premiums by the end of 2015 and we would expect International and Emerging Markets to represent around 70% of total premiums in the next five years. The 7% increase in the final dividend to 5.70p (2009: 5.33p) reflects our confidence in the outlook for the Group."