Ageas to ‘double down’ on broker-led personal lines in new strategy

Insurer Ageas has unveiled a new long-term organisational strategy, promising to “double down on growing our personal lines business via brokers, that can be electronically traded”, a focus that Ageas UK chief executive Ant Middle calls the insurer’s “heartland business”.

The new four-year strategy has been in the pipeline since Middle was promoted to Ageas’s top spot last summer. After setting new ambitions for the business within a month of getting “the chair warm”, Middle then started the strategic review process in September. This concluded in February 2021, with the business beginning broader communications to its broker partners from March onwards.

“Personal lines is where we’ve got our deepest heritage and our greatest strengths. It is two-thirds of our business, it’s where we deliver our most consistent results already and it’s where there’s real support needed by brokers,” Middle explains.

“There’s a real demand for us to provide support for brokers in personal lines. We’re going to be really pleased to back brokers and focus our business on backing them as they navigate with us everything the next few months and years are going to bring.

“We think that by focusing on our heartland business, personal lines business via brokers that can be electronically traded, there’s real opportunity for us there.”

This approach builds on Ageas’s current business model, where two-thirds of its income is derived from standard personal lines business - Middle describes this as “electronically traded, personal lines, home and motor business”. Furthermore, Ageas is “largely an intermediated business”, with 85% “of everything we do” being conducted via brokers and intermediaries.

A secondary goal of the new strategy is to “develop our personal lines business via aggregators”, which makes up “a relatively small proportion of our business”.

“We’ve got heightened ambitions. We expect more for the business - we want to think bigger and we want to continually improve the business as well. We’re not complacent at all,” Middle adds.

Substantial investment

In terms of how Ageas UK plans to deliver its objectives for broker partners, Middle says it comes down to “substantial investment” in key areas.

He continues: “We’re going to focus a significant investment in building top quartile capabilities that we need to win in our technical engine room - so in pricing, underwriting, claims [and] having the data and technology available to support those capabilities. Make sure that we’re proudly cost competitive – it’s a necessity in our market and we consider being cost competitive a key capability for our business looking ahead.”

Passing on the benefits of being more cost efficient is an important facet in building broker relationships, adds Adam Beckett, Ageas UK’s chief distribution officer.

He says: “To provide a lower cost business means the end customer that we share gets money in their back pocket because we’re able to put a keener rate out there for them and also we’re able to be flexible in our trading approach, to identify ways that we can work closer together [with brokers] going forward.

“We’ll be proud of being continually cost efficient, continually automating what we’re doing and passing that saving onto the customer - that in itself will be a technical capability we’ll develop.”

As for the ringfenced “top quartile capabilities”, Beckett explains these will be centred around Ageas’s “technical engine room” and will encompass technical pricing and underwriting, fraud detection and analytics, risk selection improvements, claims handling and claims management, data optimisation, machine learning, artificial intelligence and speech analytics.

This work also feeds into Ageas’s “growth ambition” – Middle hopes the new strategy will boost the insurer from a £1.2bn business to a £1.5bn business by 2024, as well as see the firm showcasing a consistent 95% combined operating ratio.

Welcome change

For Beckett, brokers have reacted “with a real warmth and a positivity” to Ageas’s refocus around broker-led personal lines business.

He says: “The sharp focus and the choices we’re making on the business mean we will be able to spend more of our time, with more of the capability we invest in, working closely with our personal lines broker partners.

“Ageas has always been very committed to the personal lines broker landscape. [Its] now doubling down on that. We will have more focus and more time to work with those personal line broker partners.

“These conversations with brokers have been warm. They haven’t been easy, but they’ve been great conversations to have because we’re leaning in and supporting where others may not be.”

Beckett adds that personal lines brokers are mainly looking for consistency and data science capabilities from insurers – two areas that Ageas plans to deliver on.

Business as usual

But what about Ageas’s commercial lines portfolio? Consisting of non-standard, schemes and affinity business, Middle explains that commercial lines represent a third of the insurer’s overall income.

However, profits here have grown “modestly” and consolidation “feels like the right next step”, Middle adds.

“For that area of our business, it’s simply business as usual,” he continues. “We are going to create a dedicated business unit to look specifically at the management of those lines of business.

“The focus will be on commercial excellence, making sure we are delivering the result that we need for that business as we consolidate it.”