The group’s total general insurance premiums grew by 4.8% to £989m and life business grew slightly to £53.9m.
But general insurance business claims at £706m were higher than planned after the summer floods in 2007 and 2008 and that, coupled with the stock market falls, resulted in an overall after-tax loss of £453m.
“Like many financial services providers, we are not alone in experiencing fallout from the global downturn,” group chief executive Lindsay Sinclair said. “But our capital position is strong, with £10.3bn of assets under management and a general solvency ratio of 225%.”
The company also benefited from nearly 95% of general insurance customers renewing their policies in 2008. Through its Mutual Bonus loyalty scheme, it expected to return a record £85m to those renewing premiums this year and said that in 2010 – its centenary year – the bonus would be doubled. That could mean a discount of up to 20% off premiums for the most loyal members.
Flood claims washed away all profits for NFU Mutual.