Co-op’s premiums slump, contributing to woeful profit results

Part of the blame also falls on new rewards scheme

Co-op’s premiums slump, contributing to woeful profit results

Insurance News

By Terry Gangcuangco

No thanks to its insurance business, which saw sales drop 21%, Co-operative Group Limited (Co-op) has reported an underlying profit before tax of £14 million – still a 48% drop from last year’s £27 million. Co-op also attributed the decrease to a new reward scheme worth millions of pounds.

Here are the numbers for Co-op’s biggest business areas:

Co-op Food
  • Operating profit - up 22% to £77 million (2016: £63 million)
  • Underlying operating profit - up 3% to £65 million (2016: £63 million)

Co-op Funeralcare
  • Sales total - up 1.2% to £166 million (2016: £164 million)
  • Operating profit - down 33.9% to £41 million (2016: £62 million)
  • Underlying operating profit - stable at £41 million (2016: £42 million)

Legal Services
  • Sales total - up 9.1% to £12 million (2016: £11 million)
  • Operating profit - down more than 60% to £0.2 million (2016: £0.6 million)

Co-op Insurance
  • Sales total - down 21% to £164 million (2016: £208 million)
  • Operating loss - £11 million (2016: loss of £4 million)
  • Underlying operating loss - £1 million (2016: profit of £11 million)

As for the reward scheme, it cost Co-op a total of £35 million – £29 million worth of member rewards plus £6 million for local causes. Group chief executive Steve Murrells noted that over 1.1 million people had signed up since the launch of the reward scheme in September 2016.

The co-operative also said its operating profit of £51 million – down from 2016’s £72 million – reflects continuing rebuild of businesses. Meanwhile, Co-op has sold its remaining 1% stake in the Co-op Bank to an existing shareholder.


Related stories:
Co-op car insurance chatbot to give an estimate in under 30 seconds
Profitability to weaken in European reinsurance, says Fitch

Keep up with the latest news and events

Join our mailing list, it’s free!