Ageas UK returns to full-year profit after ‘great’ 2011

Ageas UK made a profit before tax of £105m in 2011 compared with a £24.8m loss in 2010.

The insurance group’s return to profitability was helped by a 68% surge in revenue to £2bn (2010: £1.2bn) and a 9.6 percentage-point improvement in combined ratio to a just-profitable 99.9% (2010: 109.5%).

Chief executive Barry Smith said: “2011 has been a great year for Ageas UK. We set out to deliver significant growth and a step change in profits and this has been achieved thanks to a tremendous team effort, resulting in our best-ever performance.”

Ageas UK’s non-life business was the main driver of the group performance. The business swung to a £75.9m profit in 2011 from a £32.2m loss in 2010. Gross written premiums surged 70% to £1.7bn (2010: 1bn), and the combined ratio improved by 10 points to 98.8 (2010: 108.8%).

Of particular note was the personal lines motor business, whose combined ratio improved 10 percentage points to a profitable 95.4% (2010: 105.4%) against a backdrop of rising bodily injury claims.

Ageas attributed the motor improvement to its “consistent approach of pricing to reflect the underlying risk”.

Tesco Underwriting, the motor and household underwriting partnership with Tesco Bank, now has more than 1.5 million customers and generated gross written premium of £655.3m in 2011. Ageas owns 50.1% of the venture.  

Profits in the retail division, which contains Ageas’s broking businesses RIAS, Kwik Fit Financial Services, Ageas Insurance Solutions and Castle Cover, increased 94% to £34.3m (2010: £17.6m). Revenues grew 48% to £213.6m (2010: £144.8m), which Ageas attributed to recent acquisitions (including Castle Cover in March 2010), organic portfolio growth and good growth from affinity partnerships.