£100m profit for NFU Mutual despite flood payout

Rural insurance company NFU Mutual has announced it made a group profit of £101m last year, despite paying out over £100m to customers affected by last summer’s flooding.

Growth in general insurance sales was a key factor in this profitability, says group chief executive Ian Geden. Premiums were up 3.4% to £899m. This was achieved through a combination of new customers and an increase in those renewing policies to 93.6%. It was also the “best year ever” for Life business, with premiums for pensions, investments and protection policies up 17% to £400m, he added.

Last summer’s floods cost NFU Mutual over £100m,
but the company has been praised for its handling of claims.

The results were particularly encouraging given that the company paid out on 13,000 flood-related claims, he said. In worst-hit areas, such as the midlands, where floods led to 3000 claims, costing over £57m, extra staff and mobile offices were brought in and immediate interim payments of £500 were made to people whose homes were damaged.

“The result was a level of service of which we are proud and has resulted in many letters of thanks,” Mr Geden said.

After the company’s response to the floods, NFU Mutual has been shortlisted for the General Insurer of the Year and Customer Care Awards in this year’s British Insurance Awards. The winners will be announced on 9 July.

“It’s a tremendous accolade to the professionalism, hard work and dedication of our staff and agents,” Mr Geden added.

The strong 2007 performance, means the company will give a discount of up to 10% on premiums to any policyholders renewing general insurance policies throughout 2008.