General Insurance Business 19
77.0% 22.7% 99.7% 17.7%
Loss ratio Expense ratio Combined ratio Return on capital
employed
2012
2011
2012 2011
Gross written premiums £1,485m £1,456m
Underwriting profit £5m £30m
Investment return £112m £46m
Operating profit £117m £76m
Loss ratio 77.0% 74.5%
Expense ratio 22.7% 23.2%
Combined ratio 99.7% 97.7%
Pre tax return on capital employed 17.7% 12.9%
Motor in force policies 3.0m 2.9m
Total in force policies 4.1m 3.9m
Gross written premiums grew by just 2% for the year Our customers
Statements and Reviews
as a whole but this masked divergent experience 2012 was also a year in which we made further
between products and channels. The direct business progress in making it easy for our customers to
continued to grow very strongly, increasing the do business with us. One example of this was our
number of in-force car insurance policies by 17% implementation of a new claims system which
to 1.78 million. This resulted in gross premiums allowed us to redesign and significantly enhance our
written for direct car insurance rising by 15% claims processes. This has led to a more efficient
to £662 million. Within home insurance, where and personalised claims service and resulted in an
competition is intense, the direct business grew increase in customer satisfaction scores and a 12%
by 6% to 529,000 in-force policies and total gross reduction in the claims lifecycle.
Our Businesses
premiums also rose by 9% to £146 million.
Our brand awareness also continues to gain
The broker business wrote £655 million of momentum and we now have over 70% awareness
premiums in total, which was 9% down on 2011. amongst consumers.
In commercial lines, however, written premiums
grew by 16% to £160 million, predominantly due As in previous years, the quality and consistency
to growth in the SME sector. This growth reflects of our customer service was re-affirmed by a
our increasingly strong relationships with regional number of important customer service awards.
Risk Management
brokers and a successful online proposition for Our customers voted us ‘Best Car Insurance
broker-sourced commercial package policies. In Provider’ in the Consumer Moneyfacts awards and
commercial motor, we found that market premium ‘Most Trusted Provider’ in the Moneywise awards.
rates remained inadequate and we were content The Consumer Association’s Which? magazine
not to seek growth in market share and as a result voted us a recommended provider for car and
commercial motor business grew by just 1% to £85 home insurance and we have topped their tables
million. Similarly, increased price competition in for travel insurance and breakdown cover.
Corporate Governance
broker motor personal lines saw sales fall 16% to
£481 million. In all, we won more than 20 awards in 2012,
covering all aspects of our business from
underwriting and marketing, through to claims
Motor in force policies handling and customer service, as well as for
counter fraud initiatives and analytics. The two
3.0m
Total in force policies
most prestigious awards resulted in LV= being
named General Insurer of the Year at the British
Insurance Awards and the Best Customer Services
4.1m provider in financial services at the European Call
Our Accounts
Centre Awards.