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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/insurer-feels-brunt-of-uk-claims.jpg"><img class="alignnone size-full" title="Insurance Australia Group revealed losses in the UK as it battles against soaring injury claims" src="http://londonglossy.com/wp-content/uploads/2011/02/min-insurer-feels-brunt-of-uk-claims.jpg" alt="Insurance Australia Group revealed losses in the UK as it battles against soaring injury claims"/></a></p>
<p>Equity Red Star parent company Insurance Australia Group has revealed worse-than-expected losses in the UK as it battles against soaring injury claims.</p>
<p>The Sydney-based group, which owns UK operations including the Equity Red Star Lloyd&#8217;s of London syndicate and specialist commercial insurers, said its British arm suffered a 121 million Australian dollar (£76 million) insurance loss in the six months to December 31.</p>
<p>It warned the hit would impact wider group half-year results, with net profits now expected to more than halve, while it also trimmed full year expectations as costs mount from the recent severe floods in Australia.</p>
<p>Insurance Australia Group (IAG) has struggled in the UK in recent years as the rise of &#8220;no win, no fee&#8221; claims handlers has sent injury cases rocketing.</p>
<p>IAG has increased rates by up to 20% across private motor books, with more &#8220;significant&#8221; rises to come as it steps up action to tackle UK losses.</p>
<p>However, the group was also impacted by an 11 million Australian dollar (£7 million) bill for winter claims in the UK after the severe December weather.</p>
<p>Mike Wilkins, IAG managing director and chief executive, said: &#8220;We have made progress during the period in remediating our operation in the UK, but I&#8217;m disappointed to report that bodily injury claim inflation has continued to affect the local industry, and has exceeded our previously held expectations.</p>
<p>&#8220;This, coupled with rate increases taking longer than anticipated to emerge in non-private motor classes, has contributed to a greater than expected loss for this business.&#8221;</p>
<p>The wider parent company, which is Australia&#8217;s biggest home and car insurer, also said it was facing around 300 million dollars (£188 million) so far in weather-related claims &#8211; largely due to the widespread damage caused by last month&#8217;s flood crisis in Queensland, northern New South Wales and Victoria.</p>
<p>IAG bought its first operation in the UK in 2006, when it acquired direct to consumer insurance firm Hastings Insurance Services.</p>
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