British financial giant Lloyds Bank, which plans to shut more branches and slash more jobs, recorded lower insurance income in the first half of 2016.
The bank said its insurance division posted an underlying profit of £446 million in the first six months of the year, 24% lower than the £584 million registered in the same period in 2015.
Costs increased by 7% to £395 million, reflecting significant investment spending and a £29m levy associated with the Flood Re scheme.
Life and pensions sales declined by 32% to £4.79b while income fell to £124m. For general insurance, gross written premiums decreased to £555m while income declined to £168m.
From January to June, Lloyds provided more than £500 million of life assurance and critical illness cover to individuals and businesses across the UK.
It also helped over 14,000 customers who were impacted by the storms and floods in the first half of 2016.
The major bank also strengthened its general insurance position with the recent launch of a flexible online home insurance offering that allows customers to tailor policies to their individual needs.
Lloyds revealed the performance of its insurance business during the recent presentation of its half-year results. It reported a slightly lower underlying profit of £4.2 billion.
“We have delivered a good financial performance in the first half with robust underlying profit, a doubling of statutory profit and strong capital generation, along with continued progress on our strategic initiatives,” said Lloyds CEO António Horta-Osório.
However, Horta-Osório noted that “a deceleration of growth seems likely” amid economic uncertainties following the Brexit vote last month.
Lloyds is now expanding its simplification programme as a “response to evolving customer behaviours.”
The programme includes the closure of 200 branches and the axing of 3,000 jobs by the end of 2017. It has not been revealed yet which businesses will be affected.
The move is expected to generate significant additional cost savings for Lloyds, which has revised its savings target for the end of 2017 from £1b to £1.4b.
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