Ben Dyson’s results blog

8 March 2012

Aviva’s UK general insurance business has rounded off the main reporting season in style with a solid performance. The division’s operating profit (excluding the now-sold RAC business) was up 11% to £433m and its combined ratio was a static, but profitable, 96%. As with several of its peers, though, the good performance was almost entirely down to personal lines. The commercial combined ratio jumped to 105% from 96%, largely because of unprofitable business in the commercial motor book. The commercial motor combined ratio jumped to 113% from 98%. Growth in commercial net written premiums was largely flat at £1.68bn in 2011 versus £1.62bn.

Thank goodness, then, for personal lines, where premiums grew 11%  and the combined ratio improved to 91% from 97%.

 

7 March 2012

Everyone was expecting a bit of a shocker from Admiral in 2011 following its November profit warning and concerns about its reserving. However, while the company acknowleded 2011 was disappointing, it beat its own estimates, posting 13% profit growth when it had predicted 10%, and releasing £6.3m of reserves in the second half when it had told the City not to expect any releases. In his trademark colourful style,  Admiral chief executive Henry Engelhardt summed it up: “If this is, as Dickens put it, the winter of despair, then I say: Please, Sir, may I have some more?”

 

6 March 2012

Omega’s 2011 losses came as no surprises to the market given its difficult year, marked by catastrophe losses and its failure to find a buyer. After the tumultuous 2010 suffered by the company, during which the board was cleared out and losses were made, chief executive Richard Pexton must be hoping for a quieter - and more profitable - 2012.

 

5 March 2012

Amlin revealed the biggest catastrophe loss of the listed Lloyd’s firms at £500.8m, and continuing troubles at Amlin Corporate Insurance, which it bought from the company formerly known as Fortis in 2009. All this resulted in a combined ratio of 108%. No surprise that Amlin chief executive Charles Philipps called 2011 Amlin’s worst year since 2001.

 

1 March 2012

JLT left Aon, Marsh and Willis eating its dust today as it reported organic growth 7.3% for 2011. Chief executive Dominic Burke said that the outperformance was evidence that JLT continues to take market share from the big three. As you would expect, he was all smiles and ebullience at today’s results press conference.

Hardy’s Barbara Merry will find little to be pleased about in her company’s £35m after-tax loss today. The company was hit particularly hard by the 2011 catastrophes because, unlike many of its Lloyd’s peers, Hardy focused its underwriting outside the so-called peak catastrophe zones of Europe and the US. Still, the loss was expected, there were no extra nasty surprises, and the company can now focus on finding a buyer.

Results day was bitter-sweet for Novae’s Matthew Fosh. His company made a loss after tax of £7.4m, and posted a combined ratio of 101.5% as a result of the 2011 catastrophes. However the company absorbed the hits much better than its mid-tier Lloyd’s peers, and its loss was smaller than expected.

For most of the companies covered here, a drop in claims is a cause for celebration, but not so for claims management firms, of course. While companies such as Direct Line Group (as we must remember to call it) benefited from a milder winter, Ai Claims’ profit dropped 23% for the same reason.

 

29 February 2012

Lloyd’s insurer Brit continues to report surprisingly detailed results from the relative obscurity of private equity ownership. Sadly no hints on what is happening with the sale of the UK retail division, but otherwise the results look good. The £75.8m profit before tax is quite a drop from 2010’s £116.4m, but a profit is not to be sniffed at in today’s market, and the 35% decline is by far not the worst in the Lloyd’s market.

 

28 February 2012

Given the catastrophe exposure of its London market-based international business, QBE Europe’s 23% drop in insurance profit looks like a good result, especially given the much steeper fall in profits posted by its catastrophe-exposed peers. Granted, QBE Europe’s 2011 combined ratio is five points higher than in 2010, but it is still a solid 95.5%.

 

27 February 2012

The release of Allianz Insurance’s UK GAAP numbers today confirmed what the group results indicated last week – that the German insurance group’s UK arm has turned in another solid, creditable performance. Allianz UK’s results haven’t improved as much as those of its peers, but that’s because they haven’t had to.

LV=’s general insurance managing director John O’Roarke should be very pleased with the result his division reported today. Not only has profit before tax doubled, but the combined ratio is now comfortably in profitable territory after last year’s loss-making  A combination of a maturing motor book. better pricing and higher premium volume helped the combined ratio.

Hiscox’s 88% drop in profit does not look great at first glance. However, the fact that the company was still profitable in 2011 despite paying a catastrophe claims bill of £270m earned it plaudits from analysts. So did the 49% increase in UK profit, which was helped by forging stronger relations with brokers large and small.

 

24 February 2010

Chartis has reversed 2010’s $1.1bn operating loss, making a profit of the same size in 2011. However, the AIG-owned global insurer has bucked the trend currently playing out in the UK general insurance market. Its commercial result improved, while its personal lines result deteriorated markedly. It will be interesting to see what contribution Chartis’s UK business made to the this global performance when it releases its results in March.

Pulling out of payment protection insurance (PPI) has done Lloyds Banking Group’s general insurance business no harm at all. Its gross written premium may have diminished as a result, but profitability continues to grow. And its combined ratio is now an industry-beating 69%. However, the bank itself continues to pay the price for dabbling in PPI: Lloyds Banking Group’s £3.2bn provision to compensate customers who were mis-sold PPI pushed it into a £3.5bn loss for 2011.

 

23 February 2012

A bumper crop of results this morning, and more encouraging signs that the UK general insurance market has done well in putting its shop in order during 2011.

RBSI continued its profitability run, posting a £454m profit for the full year. The absence of reserve strengthening helped, as did the lack of winter weather claims this year, but credit has also got to go to the company’s re-underwriting and repricing efforts.  Paul Geddes can be satisfied that despite how bad things looked in 2010, he has consistently delivered quarter after quarter in 2011.

Likewise, RSA’s UK operating result showed a big improvement, more than doubling to £310m. The company is clearly still wrestling with some commercial lines, however, and it is interesting to note the 10% premium cut-back in its regional commercial business.

Another company that appears to be on the mend is Equity Red Star. Parent company IAG’s chief executive Mike Wilkins says the company is now close to breakeven, after it made a much smaller £5m loss in the six months to 30 December 2011 and posted a much improved combined ratio of 102.8%. This should help appease some of the analysts and investors who were clamouring for the UK unit to be sold.

 

20 February 2012

The Ageas results this morning are a further indicator that the UK is likely to be a bright spot in an otherwise tough 2011 for large European insurance groups. While Greek debt write-downs have laid the group results to waste, resulting in a €578m (£480m) loss, Ageas UK has had a very good year, returning to profitability on both a pre-tax and underwriting basis. Ageas UK should be particularly pleased with its 95.4% personal lines motor combined ratio, which compares very favourably with the 101.7% motor ratio AXA reported last week.

Roll on Thursday, where we get to see what has happened to the full year numbers of Allianz, RSA and RBS Insurance ­ or Direct Line Insurance Group, as we will soon have to get used to calling it.

 

17 February 2012

From what we’ve seen so far, the 2011 results season promises to be an interesting one. Companies writing global business, such as the Lloyd’s firms, will be counting the cost of the 2011 catastrophes, while the UK-focused insurers’ numbers are likely to have been buffeted by the opposing forces of rising personal lines rates, a relatively benign winter, continuing bodily injury claims inflation and stubbornly low commercial rates.

Brokers, meanwhile, are having to do battle against dwindling growth opportunities and rising costs.

The results from the US-listed mega-brokers – Aon, Marsh, Willis and Arthur J Gallagher – are in and make interesting reading. Possibly slightly uncomfortable reading if you work at Willis. It will be interesting to see where JLT fits into the picture when it reports its full year results on 1 March.

Catlin and Beazley have already given us a taste of what is in store for the Lloyd’s and international markets. Both have made a profit, but vastly smaller ones than the previous year thanks to large catastrophe claims bills.

On Thursday, AXA and Zurich gave us a first impression of what is happening in the mainstream UK non-life market. Here the story seems to be meaningful improvements coming through from corrective pricing and underwriting actions taken over the past 18 months to two years, although it is clear that AXA, at least, still has some work to do to keep its underwriting profitability in check, especially in motor.

In addition to talking about their results, it looks like insurance bosses are going to have plenty to say about their recent meeting with prime minister David Cameron to discuss cutting motor rates by reducing whiplash claims. Hopefully they don’t try to use this headline-grabbing event as a way of detracting attention from lacklustre performances …