UK business to become separate operating division
Fortis UK chief executive Barry Smith said the insurer had outperformed the market, despite posting a drop in half year profit before tax to £31.7m in 2009, compared to £43.2m in 2008.
Smith said the drop was small compared to competitors posting their results this summer, and could be attributed to falling investment returns, high claims related to cold weather in the first quarter of the year, and increased costs, including those from credit hire.
Fortis has seen its non-life premium grow 7% year-on-year, to £401.6m from £375.5m. Smith said it had picked up some business from competitors among the major insurers who have raised rates, but added: “Our success is driven by two factors – what we do, and what other people do.”
Smith outlined continued growth plans as Fortis begins to put its commercial strategy into place. Major recent announcements include affinity partnerships with Tesco Personal Finance, Toyota and the Post Office. Smith said further deals could follow. The insurer is also growing its accounts with a number of brokers – among them, Towergate, Giles and Kerry London.
He said rates in commercial motor remained sluggish, but there had been some rises in personal lines.
Fortis UK’s life business saw growth with annual premium up to £6.4m. Retail commission income generated by its distribution businesses, RIAS, Fortis Insurance Solutions and InsureTECH Systems, were down slightly to £42.8m, from £43.3m.
Smith welcomed this week’s announcement that Fortis UK will become a separate operating division within the Fortis Group – one of only four. Previously, the UK was part of the European division. Smith, who will now take a place on the group’s management committee, reporting directly to global chief executive Bart de Smet – called the move a “promotion” for the UK. He said it signalled a commitment to growth, and further developments could be expected this autumn.
