RBS Insuranc(Direct Line Group) has reported 2011 results.
Highlights are:
-Operating profit of £454m, compared with a loss of £295m in 2010. Performance comprises a £749m improvement in operating profit from 2010, benefiting from absence of 2010 reserve increases, de-risking of motor book, exit of certain business segments, and more benign weather in 2011.
-Successful completion of the first phase of management’s business transformation plan with a return to annual profit,and
fourth quarter operating profit of £125m represents the fifth consecutive quarter of year-on-year improvement in operating result.
-Combined operating ratio improved to 100 (2010: 122).
-Return on equity of 10.3%, compared with a negative return of 6.8% in 2010.
-Currently upgrading claims systems and transforming claims operating model. All new Churchill, Direct Line and Privilege motor claims, as well as all new Churchill home claims, are now being processed through the new system.
-Rationalised our legal underwriting entities from 4 to 1(UKI, Churchill, NIG, Direct Line down to UKI).
-After the period end, RBS Insurance rebranded as Direct Line Group.
-Controlled costs with the reduction of occupied sites. 15 site exits by the end of 2011 and developed off-shore capability.
Paul Geddes,ceo, RBS Insurance, comments “We have turned around our financial performance and successfully completed the first phase of our transformation plan: to return to profit. Tangible benefits are already being delivered from phase two–building competitive advantage–as we continue to invest in the future capability of the business. Securing a five-year contract with Sainsbury’s Finance to provide their customers with car and home insurance, as well as expanding our provision of Nationwide’s home insurance, are further endorsements of our proposition. The process of separation is proceeding on plan, and we recently hit the important milestone of launching our new corporate identity.”
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