AA grows home insurance despite tricky conditions
AA pre-tax profits for the year ended January 2019 fell more than 60 per cent to £53m.
The firm cited the cause of the fall due to the £26m investment it is making in its roadside assistance and insurance business.
There was also a £22m non-cash adjustment for guaranteed minimum pensions equalisation and a pension credit of £34m in the previous year.
Earnings were down to £341m from £391m last year.
Insurance results fall
The insurance results also declined with revenue down to £138m (£145m: Jan 2018) and trading EBITDA down to £58m (£71m: Jan 2018).
However, the insurance business was growing quite strongly - despite some other players scaling back in home - on both the broker side policies and its own in-house underwriter premium’s underwritten.
| Year end Jan 19 | Year end Jan 18 | |
|---|---|---|
| Average income per policy (£) | 69 | 75 |
| Total Motor policies (000s) | 731 | 629 |
| Total Motor underwritten (000s) | 339 | 223 |
| Total Home policies (000s) | 830 | 818 |
| Total Home underwritten (000s) | 259 | 184 |
Despite tricky market conditions, AA said it is targeting higher growth in home.
AA said: ”The home policy book increased slightly in the year to 830,000 (2018: 818,000).
”This was a strong performance as we have yet to make the investment in IHP to improve our pricing agility. Looking ahead, we are confident that the additional investments in our systems as well as the commencement of the roll-out of IHP will drive further growth in the home policy book.”
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