Annual report and accounts 2000
Operating review
18 CGNU plc
General insurance
General insurance operating
profit before tax
2000
1999
– ongoing business*
£m
£m
UK
296
290
France
(115)
(8)
Ireland
21
15
Netherlands
(4)
7
Other Europe
20
22
Australia and New Zealand
82
15
Canada
78
93
Other international
34
25
Total – ongoing business*
412
459
The merger made CGNU the clear leader in
UK general insurance, operating under the
Norwich Union brand and with 20% of the
market. While the UK accounts for over
half the Group’s general insurance premiums,
CGNU also leads the market in Canada,
Ireland and New Zealand, and is one of
the top five insurers in the Netherlands
and Australia.
Greater size presents opportunities for
reducing costs and raising the quality of
earnings. The Group’s strategy is therefore
to be a leader in selected general insurance
markets or to withdraw – and to make the
business less volatile by moving away from
large commercial risks and focusing on
personal and small commercial lines. Other
priorities are to further improve the service to
customers and to adopt a rigorous approach
to underwriting and claims management.
UK
The combined general insurance business
began operating on 2 October 2000, just four
months after the merger was approved.
We remain on track to complete one of the
largest mergers the UK financial services
industry has ever seen by creating the UK’s
leading general insurance company. Currently,
Norwich Union insures one in five UK
households, one in five motor vehicles and
700,000 businesses.
Our vision is to be a fully integrated,
multi-distribution insurance company. Part
of our commitment to exceeding customer
expectations is to provide our products through
a variety of distribution channels, whether via
the internet, through a bank or building
society, or a high street broker. At the same
time we are using our strength, size and skills
to deliver economies of scale and a sustained
competitive advantage. This will ensure that we
continue to enhance the earnings of