Monday: Tesco pushes Ageas to new heights

Ageas UK boss Barry Smith today hailed the insurer’s annual results as the company’s “best-ever performance”. And he has every right to be pleased. It has posted signs of profitable growth across the business – a massive turnaround from 12 months ago when Ageas UK’s non-life business was in the red.

Just like its counterparts AXA and Zurich – which reported improved results last week – Ageas’s performance is mainly down to its focus on re-underwriting and re-pricing business. A shrewd move in the current market that seems to be paying off.

Despite some insurers having already reported continuing motor woes (AXA’s combined operating ratio for personal motor was 101.7% in 2011), there were no ‘ifs’ or ‘buts’ in Ageas’s performance – its own motor COR swung 10 percentage points to a profitable 95.4% (2010: 105.4%).

What Smith and Ageas bosses will be extra keen to highlight, however, is the performance of Tesco Underwriting. The deal generated £655m of gross written premium from more than 1.5 million customers in 2011 – and seems to be paying off. It has played no small part in helping Ageas build an overall business now pushing revenue of £2bn.

So how does the UK business reflect among the wider Ageas group, and what’s next? The Belgium-based group has been slapped by the eurozone crisis – as Greek debt write-downs led the group to report a 2011 loss of €578m (£480m). This has left the UK business glowing – and is further evidence that UK arms of large European insurers are likely to come out singing during this annual results period. But where have we seen this before? Groupama of course.

The French insurer, which has a well-performing UK business but a parent laden with sovereign debt troubles, took decisive action when it put Groupama UK up for sale last month. All that the Ageas UK management can do for now is continue to keep pulling in the profits.