LV reaps benefits of below average motor rate increases

As the mutual insurer released its half year results for 2010, Mr O'Roarke said: "In any other year this hike would mean you would miss your volume sales plan by a mile but the rest of the market has gone up more than we have and as a result we have written more business at a higher rate.

"There are still rate increases in the pipeline and if the market feels the need to increase rates due to claims inflation then we are preapred to push them up further."

Broker business at LV has increased by 56% and Mr O'Roarke said: "The biggest impact has been on our private car account where we have just been swamped with volume. Quite a lot of capacity has gone out of the market with Corinthian and Quinn pulling out and Zurich hiking up its rates.

"Pretty much everyone has put rates up incredibly strongly but for the particular segments of business we want to write we have found it quite easy to write it profitably."

Mr O'Roarke said that after making a loss last year, the Highway business had been more focused on profitability and securing rate strength.

However, he added: "Having said that we have written a lot more premium as the market has allowed us to put rates increases through and still hit our sales targets. We haven't had to trade off volume against profitability."

According to Mr O'Roarke the commercial side the business, sold through the branch network, had grown considerably after the insurer added new broker relationships and products.

"In the past brokers have been reluctant to move an account to us as it has been partly small to medium-sized enterprise (SME) and partly fleet and we were only offering the SME side but now we have the full product set. That side of the business has grown and we expect to write about £100m of commercial business in total this year," he added.

Another point Mr O'Roarke raised was the launch of LV's broker household product. It had a low key roll out last month with software houses SSP and CDL managing volume.

"It is in a prototype phase but hope to roll this out to the top five, including Swinton, Budget and AA, in 2011. It wouldn't surprise me if we were to write £100m of broker household business in the next two to three years," he predicted.