AXA UK has reported a current-year combined ratio of 100% for the first half of 2011, indicating that the insurer’s underwriting has moved to a break-even position from a loss-making one.
The ratio is a 2.1 percentage point improvement over the 102.1% ratio AXA UK posted at the half-year point in 2010.
However, as a current-year ratio, the number excludes the impact of prior-year reserve development.
AXA also reported that UK direct personal insurance gross written premiums rose 22% bringing total UK and Ireland non-life revenues to £2bn – 4% up on last year’s first half.
The company gave no details about broker personal lines or commercial business.
“The sustained growth and improved profitability across each of the UK & Ireland operations, against a continuing background of challenging economic conditions, demonstrates the benefits of the reorganisation completed in late 2010 and the resolute focus we now have on each of our target market segments,” AXA UK and Ireland group chief executive Paul Evans said in a statement.
Evans also called for more radical measures to tackle referral fees, suggesting a “robust” review of the fixed fees earned by personal injury lawyers.
“The fixed fees under the Ministry of Justice (MoJ) Portal are quite obviously too high at £1,200 given they allow an average referral fee of around £800 to be paid and still generate sufficient profit,” Evans said. “The near doubling in claims management firms between 2008 and 2010 stands as testament to the level of profitability available from this work. Logic suggests that a reduced standard fixed fee in the region of £400 would still allow personal injury lawyers to earn reasonable profits.”
AXA announced in late June that it would stop accepting referral fees after newspaper articles sparked a furore over the controversial payments.
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