AXA UK underlying earnings down 44%

AXA UK & Ireland made an underlying profit of £131m for the full 2010 year, down 44% on the £235m it made in 2009.

The company’s combined operating ratio (COR) came in at 105.3%. The UK winter freeze cost AXA £118m, adding 3.3 points to the COR.

Excluding the impact of the freeze claims, the COR would have been 102%.

“An improvement on 2009, the current year combined operating ratio of 105.3% was nevertheless disappointing, reflecting the 3.3pts of exceptional winter freeze claims,” said AXA UK & Ireland group chief executive Paul Evans in a statement.

“Further improvements will come through during 2011 as the premium increases applied during 2010 across Personal Lines insurance take effect, but further pricing action will be necessary together with ongoing productivity improvements.”

According to AXA’s group results, UK & Ireland non-life net income for 2010 was €32m (£26.9m), down 27% on 2009’s €44m.

Underlying earnings un UK & Ireland non-life halved to €50m in 2010 from €100m in 2009.

Total non-life revenues increased 3% to £3.6bn. This was largely driven by a 17% increase in UK personal insurance revenues to £1.4bn, which was in turn thanks to a 71% increase in the direct private motor business.

According to group figures, UK & Ireland commercial motor revenues were also up in 2010, increasing 10%.

However, commercial non-motor revenues declined 11% in the UK following the exit from certain property accounts.

“I am delighted with the progress made in the UK Personal Lines business during 2010,” Evans said.

“The online-only platform acquired with Swiftcover in 2007 is now able to administer all personal insurance products, for each of our brands, in all distribution channels (brokers, partners and direct) at a cost and service level advantage which will fuel profitable growth across the key areas of private motor and household.”

Following the partial sale of its life business to Resolution last year, Axa UK & Ireland has restructured around four main business areas: personal insurance, commercial insurance, healthcare and wealth management.