Ageas makes an underwriting profit, but premium is down on 2018 figures
Ageas UK returned to a Q1 underwriting profit in 2019, although at the expense of some premium.
The combined ratio improved from 100.7% in 2018 Q1 to 95.5%, with a particularly strong improvement in household. This improved from a COR of 116.2% to 91.2% - improving from an £11.4m underwriting loss to a £5.5m profit.
| KEY PERFORMANCE INDICATORS BY FAMILY | MOTOR | HOUSEHOLD | OTHER LINES | TOTAL | ||||
|---|---|---|---|---|---|---|---|---|
|
in GBP million |
3M 19 |
3M 18 |
3M 19 |
3M 18 |
3M 19 |
3M 18 |
3M 19 |
3M 18 |
|
|
|
|
|
|
|
|
|
|
|
Gross Inflows (Ageas UK entities) |
193.8 |
199.0 |
64.9 |
71.8 |
33.9 |
40.2 |
292.6 |
311.0 |
|
Net Earned Premiums |
177.5 |
192.1 |
62.1 |
70.7 |
38.5 |
41.1 |
278.1 |
303.9 |
|
Net Underwriting result |
6.9 |
15.9 |
5.5 |
( 11.4) |
0.2 |
( 6.7) |
12.6 |
( 2.3) |
|
Combined Ratio |
96.1% |
91.7% |
91.2% |
116.2% |
99.5% |
116.3% |
95.5% |
100.7% |
|
Operating Result |
17.3 |
24.9 |
7.0 |
( 9.9) |
2.3 |
( 4.8) |
26.6 |
10.2 |
This stronger performance was put down benign weather and exiting underperforming lines.
Overall Ageas made a £12.6m underwriting profit, compared to a £2.3m loss for 2018 Q1. Net profit for the UK business improved to £12.4m, compared to £9.4m in 2018 Q1.
The good came with a 6% drop in premium compared to the 2018 Q1 figures. This fell from £393.3m to £370.7m, and Ageas boss Andy Watson had previously told Insurance Times that Ageas’ main priority this year would be returning the business to growth off the back of a return to good levels of profitability in 2018.
However, Ageas said the drop in premium was partially offset by growth on the aggregators, following last year’s launch of its first direct motor product.
Watson was positive this, and a recently announced five year commercial partnership with Darwin Clayton, would set up Ageas for a strong rest of the year.
“Our sustained efforts to focus on profitability, combined with benign weather in the first quarter, have put us in a strong position to start the year,” Watson said.
Ageas has made changes to senior management, closed call centres and set up a new regional underwriting team this year, which Watson said would set up the business to be stronger going forward.
| INCOME STATEMENT | |||
|---|---|---|---|
|
in GBP million |
3M 19 |
3M 18 |
Change |
|
|
|
|
|
|
Gross Inflows (Ageas UK and Tesco Underwriting) |
370.7 |
393.3 |
(6%) |
|
Gross Inflows (Ageas UK) |
292.6 |
311.0 |
(6%) |
|
Net profit |
12.4 |
9.4 |
* |
He added: “We made some tough but necessary decisions in the first quarter to simplify the business and meet changing customer needs. This is about building a business that is fit for the future for our customers, employees, brokers and partners.
“We are still very much operating in soft market conditions, which is somewhat surprising given the current levels of claims inflation.
“However, we are seeing encouraging signs in both the aggregator channel for our direct motor proposition, and the broker channel where we have secured a number of significant new deals in the last few months.”
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