The Co-op Group has reported an increase in underlying pre-tax profits to £81m from £73m last year.

It said its general insurance sales performance was in line with expectations. The managed withdrawal from less profitable business lines in 2014 led to Net Earned Premiums declining to £343m. However, Gross Written Premiums increased due to a rise in new motor business during the final quarter of 2015.

Profit was also in line with expectations until the impact of flooding in the North of England (£13m) led to the business recording a loss of £13m.

Richard Pennycook, chief executive of The Co-operative Group, said: “This has been a year of further progress at the Co-op as we have invested to drive the growth of our businesses. Underlying profits have increased but our priority this year has been on putting the building blocks in place for the long-term. Whether it’s our investment in lowering prices, rewarding colleagues or campaigning on key issues, we are taking the right steps and the performance of our businesses and the feedback from our members shows us we are on the right track.

“We are, however, only one year into our Rebuild and whether it is driving further growth in our businesses, improving member engagement or getting back to our campaigning roots, there is still much to achieve.

“We are championing a better way of doing business for our customers and communities and working with our colleagues and members we’re confident that we have a strong plan to achieve our goals.”

It has become evident this morning that Pennycook has asked that his basic salary be cut by more than one-third from the current £1.25m.

It is understood that the chief executive has also requested that his total compensation‎ to be cut by over 50%.