Ageas UK reports six-fold Q1 profit increase

Ageas UK made a profit before tax of £22m in the first quarter of 2012, almost six times the £3.8m profit it made in the first quarter of 2011.

The improvement was mainly driven by the company’s non-life division, which saw its pre-tax result swing to a profit of £18.8m in Q1 2012  from a small loss of £100,000 in Q1 2011.

However, the profit before tax at Ageas’s retail broking operation, which includes RIAS and Kwik Fit Financial Services, dropped 23% to £3.6m (Q1 2011: £4.7m), which Ageas attributed to “the current tough and competitive economic climate.”

The non-life combined ratio was a loss-making 102.3%, which the company said reflects “usual seasonal patterns in household claims”. However, it is a 3.7 percentage point improvement over the 106% combined ratio Ageas UK reported in last year’s first quarter.

Overall revenues, including life and non-life gross written premiums and revenues from the broking business, increased 11.1% to £513.3m (Q1 2011: £462.2m).

Ageas UK chief executive Barry Smith praised the results in a statement. “I’m really pleased with progress in the first few months of 2012 in what is typically a tough quarter,” he said. “We continue to build on our transformational growth of 2011 with strong increases in income and profit.”

He added: “The market is not without its challenges given the current economic and regulatory environment but our balance of underwriting and distribution across Ageas UK means that, overall, we are in good shape to continue to deliver profitable growth.”

Gross written premiums at Ageas UK’s main non-life operation, excluding the Tesco Underwriting joint venture, increased 11.5% to £300m in the first quarter of 2012 (Q1 2011: £269m). Ageas ssaid this was sdriven by growth in both personal and commercial lines.

Personal lines growth was mainly caused by the 30.3$ increase in motor GWP to £153m. The personal motor business also improved its combined ratio to 95.5% (Q1 2011: 97.3%) because of Ageas’s “consistent approach of pricing to reflect the underlying risk”.

Household premiums fell 9.4% to £74.4m (Q1 2011: £82.2m) because of pricing action, which Ageas says has improved profit performance. Travel premiums dipped slightly to £12.2m (Q1 2011: £13.3m), while commercial premiums increased 4.6% to £50.4m (Q1 2011: £48.2m).

Profit before tax in the non-life segment was £11.8m (Q1 2011: £3.9m).  

Tesco Underwriting, a joint venture with Tesco Bank, saw its gross written premium increase 9% to £145.5m (Q1 2011: £133.2m) and result before tax swing to a profit of £7m from a loss of £4m.

Despite posting a lower profit, Ageas UK’s retail broking business increased revenues by 3.1% to £52.8m (Q1 2011: £51.2m).