Ageas falls to £2.7m loss after weather claims hit hard

Ageas UK reported a loss after tax of £2.7m over the first three months of 2020, compared to a profit of £12.4m for the same period in 2019.

This decline in performance was driven by an 11.7 percentage point increase in the insurer’s combined operating ratio (COR) to 107.1% as weather related claims hit Ageas hard. Without the impact of weather claims, the insurer’s COR would have stood at a still profitable 98.7%.

The UK was hit by a number of weather events over the first quarter of 2020, with storms Ciara and Dennis resulting in claims totalling £23.5m.

Ageas UK chief executive Andy Watson said he was proud of the way the insurer is responding to claims arising from the storms, particularly in light of the impact the coronavirus pandemic has had on the insurance industry.

“In times like these, our priority is helping our people and our customers to navigate the uncharted territory we find ourselves in as a society,” he said. “But as I reflect on the beginning of the year I have many reasons to be proud. 

“We cannot underestimate the impact that the storms and floods had on our customers. The priority remains to get these customers back in their properties, while operating in very unusual circumstances. 

“Only a month later we find ourselves in a pandemic situation and thanks to a quick response, the majority of our people are able to work from home, continuing to provide a fantastic service to our customers and, importantly, ensuring we recognise and keep key workers mobile.”

The insurer has responded to the Covid-19 crisis with a number of initiatives, including free breakdown cover for its direct customers who work for the NHS, as well as not requiring an extension to cover where a customer is helping their community by volunteering to deliver food or medicines.

Ageas is also waiving administrative fees for customers who make a change directly with the insurer as a result of the lock down, as well as payment deferrals for customers in financial difficulty and with a payment plan arranged by Ageas.

Watson said that the lockdown has had a varied impact on the insurer’s product lines, with motor business benefiting from an initial reduction in claims frequency.

“While motor claims frequencies have reduced across the industry, it is still too early to have a clear picture on the overall impact,” he said. “We moved early to reduce our motor pricing to reflect the current situation; we are not applying any inflationary rate increases during this period; and we continue to work with industry bodies and our intermediated distribution channel to ensure we consider all fair options for our customers. 

“As we look ahead, we have a stable business with a strong solvency position giving us the confidence we need to emerge from a resilient position and reflect on how we become even stronger over the next few months.”

 Meanwhile, gross written premiums were broadly flat over the period, with lower motor income partly offset by the household book benefitting from a new broker proposition and with some growth in new commercial lines deals and digital channels.

And Watson also had a parting message to give before he leaves Ageas, with Ant Middle assuming the role of chief executive on 1 June 2020.

“This is my last time reporting Ageas’s results in the UK before I hand over the reins to Ant Middle,” he said. “I want to express my huge appreciation for our people, intermediaries and suppliers in supporting both our customers and business while I have been at Ageas and in particular in what has been a truly unprecedented start to the year.”