Abbey increases profits in first half

The specialist supplier of legal and professional fees insurance products and services to UK small-to-medium sized enterprises, added revenue in core trading divisions, Abbey Legal Protection and Abbey Tax Protection, were up 11% (to £8.2m).

However, revenue from its after the event ("ATE") division reduced to £0.7m (2009: £0.9m), which it said was the result of all material income from its managed run-off contracts having reached a natural conclusion.

Sales of Abbey's injury compensation product, Accident Line, were up 16% and it added sales of its new commercial ATE product were "particularly pleasing" and ahead of expectations.

The claims ratio at Abbey's reinsurance subsidiary, Ibex, improved to 63.3% (2009:67.7%), benefiting from some early year reserve releases.

The underlying loss ratios remain stable, with a marginal increase in employment claims in 2009 being off-set by reduced numbers of tax claims in the year. Despite the continued low investment yields, Ibex increased its profit by 11% to £2.1m in the first half of 2010. This profit contribution derives almost entirely from premium written by the core divisions of ALP and ATP.

Colin Davison, chief executive officer, commented: "I'm delighted to report another solid set of results for Abbey Protection, which once again underline our ability and resilience to grow the business against a tough economic backdrop and the continued low interest rate environment. Our non-cyclical business model has enabled us to produce sustained organic growth in group revenues and profits during the period.

He added: "We continue to investigate the acquisition of complementary businesses and are well placed to take advantage of the opportunities likely to be afforded by the deregulation of the legal services sector in 2011."