The U.K.-based insurer Co-operative Financial Services (CFS) has announced the creation of CIS General Insurance Ltd. (CISGIL) which will insure all new and renewing Co-operative Insurance Society (CIS) motor, home and commercial products with effect from 15 January 2006.
“Whilst all of CIS’ life, savings and investment policies will continue to be underwritten by CIS Ltd., the creation of CISGIL provides greater clarity for CFS’ general insurance operation, whose operating performance has seen a marked improvement throughout 2005,” said the bulletin.
It also noted: “CIS’s general insurance net premium income was £649 million [$1.143 billion) in 2004 and £318 million [$560 million] in the first half of 2005 (a 28 week period). Its half year operating profits in 2005 were £10.4 million [$18.32 million], before exceptional costs and short-term investment fluctuations, compared with a loss of £13.6 million [$24 million] in the corresponding period of 2004 on a like for like basis.
“CISGIL will have initial capital of £384 million [$676.5 million] (in excess of its liabilities) with no external debt. This level of capitalization represents 65 percent of annualized net premiums based on the first half of 2005 and takes full account of the Individual Capital Assessment regime recently introduced by the Financial Services Authority.”
Commenting on the initiative and the overall progress made by the CIS general insurance operation over the past 12 months, Craig Shannon, CFS Business Management Director stated: “The creation of CISGIL provides even greater purpose and clarity for our general insurance operation, whose operational performance has exceeded our expectations during 2005. The improvements made in our customer servicing, distribution, pricing and claims handling areas, have all contributed to a marked improvement in financial performance and profitability. Whilst this improvement needs now to be sustained, it is clear that our general insurance area has a bright future ahead within CFS and the right corporate structure and operating model to contribute even more.”
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