Ageas UK profits increase almost five-fold

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Combined ratio down to 99.9%

Barry Smith

Ageas UK’s profit before tax has jumped almost five-fold to £78.3m in the first nine months of 2011 after strong performance in its non-life and broking divisions.

The company posted a £16.6m pre-tax profit in the first nine months of 2010.

Profit before tax in the non-life insurance business was £52.9m (9M 2010: £7m) while the other insurance profit, which includes Ageas’s retail broking operations, was £26.9m (9M 2010: £12.9m).

Ageas UK’s nine-month combined ratio improved to a profitable 99.9% from a loss-making 104.9% a year ago. The company’s motor combined ratio saw a particularly strong improvement, falling to 96.4% from 106.9%.

The positive non-life and broking results were partially offset by a £1.6m loss before tax in the life protection business, though this was an improvement on the £3.3m los made in the same period last year. The division is in its third year of operation.

“I’m very pleased that the positive momentum we created earlier in the year has continued into the second half of 2011,” Ageas UK chief executive Barry Smith said in a statement. “Transformational growth is being accompanied by a rise in profits and an improvement in combined ratios.”

He added: “This was always going to be an important year for Ageas UK as we make a step change in the expansion of our business and today’s results are a real credit to our team.”

The profitability improvement was matched by revenue growth. Ageas’s non-life revenues increased 89% to £1.3bn (9M 2010: 703m) while broking revenues were up 70% to £163m (9M 2010: £96m).

Ageas also reported that Tesco Underwriting, the motor and home insurance joint venture with supermarket chain Tesco, has amassed 1.4m customers since its launch in October 2010. The venture, of which Ageas owns 50.1%, has brought in £591.1m of gross written premium since launch, including £504.5 million in the first nine months of 2011.

Ageas nine-month 2011 results in £m (compared with 9M 2010)