CGNU Profits Down Due To Storm Losses, Investments

February 27, 2001

As expected, CGNU, the U.K.’s largest insurer, announced a drop in operating profits for the year 2000 to £1.02 billion ($1.48 billion) between £200 and £400 million ($290 and $580 million) less than analysts had forecast.

The first combined results for CGU and Norwich Union were affected by the storms which hit the U.K. in October and November, an estimated £133 million investment in an on-line money management service CGNU is developing and the £1 billion ($1.45 billion) loss taken for the costs of withdrawing from the U.S. p/c market and the Lloyd’s market.

Initially CGNU had estimated storm losses at between £180 and £200 million ($261 and $290 million), but the actual figure exceeded the high estimate by £85 million, costing CGNU over $410 million.

As part of its restructuring operations the insurer is seeking increased business in the life insurance, pension fund and wealth management sectors. All of which showed good growth last year. In a recent development CGNU has concluded a partnership with Italy’s UniCredito Italiano to market life and savings products through the company’s bank, Cassa di Risparmio di Torino

As part of the transaction CGNU will take a 3.5 percent stake in UCI, and will cede approximately one third of the capital it holds in French bank Société Générale – about 2 percent of outstanding capital – to UCI in order to “cement their relationship.”|”cgnu, profits, down, due, storm, losses,, investments

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