NFU Mutual made a pre-tax profit of £159m in 2010, significantly down on the previous year’s £366m.
Two significant cold snaps, floods in Cornwall, an increase in the cost of large losses and in claims costs generally all contributed to an underwriting loss of £150m in 2010.
A rapid increase in activity by accident management companies and the rising cost of medical care also pushed up claims costs, said the firm. However, the total loss was not as bad as expected and the Mutual is on target to get underwriting back into profit by 2012.
Total funds under management increased to £12.4bn, while general insurance premium income increased to £1,205m in 2010 against £1,066m in 2009. Life premium income rose by 9% and the risk management services business grew by 40% last year.
General insurance customers will receive an annual bonus worth up to 10% of the premiums they have paid to the Mutual, which now has 753 agents working from 321 offices.
“We have an extremely loyal customer base, with 93% of our customers renewing with us,” said Lindsay Sinclair, group chief executive. “We operate in a very competitive market and, therefore, must ensure we maintain a strong focus on cost efficiency.”
During 2010 NFU Mutual made contributions of £6m to the national farming unions, its charitable trust donated more than £270,000 and an award scheme was launched that will pay £250,000 in course fees for postgraduate agricultural students.
NFU Mutual landed several awards and honours last year, including coming top in Which? reader surveys for customer service on its Home and Car insurance products in 2010, being voted “Top Motor Insurer” by readers of Auto Express magazine for the fifth year in a row. It was also voted “Best Home Insurance Provider for Service” by readers of Moneywise magazine and won “Best Life Insurance Provider” at the 2010-2011 Personal Finance Awards.