Ageas non-life profit doubles to £56m as broking profit dips

Ageas UK’s non-life business made a pre-tax profit of £56.1m in the first half of 2012, more than double the £23.4m profit it made in the same period last year.

However, profits at the company’s retail broking division dipped 8% amid tough market conditions.

Ageas’s non-life combined ratio was a profitable 98.8%, compared with a loss-making 101.2%, driven in part by further improvements in the personal motor combined ratio to 94.1% (H1 2011: 96.9%).

The improvement came on the back of a 5% increase in non-life gross written premium to £906.3m (H1 2011: £862.8m).

The profit for Ageas UK overall, which includes the life and retail broking arms, was up 81% to £64.1m (H1 2011: £35.1m).

Ageas UK chief executive Barry Smith said in a statement: “We continue to deliver on our consistent multi-distribution and product strategy and I’m particularly pleased with our strong profit and combined ratio performance in the first six months of 2012.”

“This builds on the significant scale change of the Ageas business over the last year. Our ethos is to deliver results by working in partnership with our brokers, advisers and clients and to provide them with customer service well above market norms. This focus will continue.”

Broking dip

Despite the positive development in the non-life business, Ageas’s retail broking businesses posted an 8% drop in profit to £16.5m (H1 2011: £18m) as revenues remained flat at £105m (H1 2011: £106m).

Ageas described  the retail broking result as “a resilient performance  in tough trading conditions”.

Ageas’s ‘other insurance activities’ segment, of which retail broking is the largest part, reported a 36% dip in profit to £8.4m (H1 2011: £13.1m).

GWP ups and downs

Excluding the Tesco Underwriting joint venture, Ageas’s non-life gross written premium (GWP) grew 6.8% to £589m (H1 2011: £551.6m).

Private and commercial motor GWP increased 19.1% to £340.8m (H1 2011: £286.2m), while household fell to £141.6m from £156.6m. The household dip was caused by “deliberate pricing action taken which has improved profit performance”.

The travel account was down to £24.8m (H1 2011:£30.4m), while commercial GWP was up 4.4% to £81.8m (H1 2011: £78.4m).

Tesco profits

The Tesco Underwriting joint venture with Tesco Bank, of which Ageas owns 50.1%, generated GWP of £317.3m up 2% on the £311.2m it wrote in the first half of 2011. The profit before tax was £17.2m, compared with a loss of £300,000 in the first half of 2011.