Ageas UK profits up but claims inflation returns to motor

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The insurer will ‘remain disciplined’ in its approach to pricing following financial toll on motor, says chief executive

Ageas UK’s profits were up 19.5% to £42.7m in the first nine months of this year, as boss Ant Middle vowed to remain disciplined on pricing.

Ageas faced the renewed challenge of motor claims costs returning towards pre-Covid levels by the end of the third quarter.

This meant the lower frequency could no longer offset the continued rise in claims inflation.

Motor underwriting profitability slipped to combined ratio of 92% - up from 87.2% - compared to the first nine months of last year, amid the renewed pressures on claims.

Combined ratio overall increased to 95.7%, compared to 94.6% in the first nine months of last year.

Ageas UK’s gross written premium (GWP) was overall down £914.6m from £945.3m.

Ageas UK chief executive Ant Middle said: “The motor rating environment is a notable point of attention as we look ahead. We will remain disciplined in our approach to pricing as we manage the range of current and forward-looking inflationary pressures, and diligently prepare for the market-wide regulatory changes.”

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Hope in household

Despite the drops, Ageas UK further revealed that its household portfolio has grown to a total of £237m GWP – up from £231.6m for the nine months ending 2020.

The insurers 2021 COR for the product also improved to 100.7% - down from 101.7% during the same period in 2020.

Middle added: “The early phase implementation of our new strategy is gaining real momentum and is strongly reflected in these encouraging results. We are already seeing benefits from our sharper focus in our chosen personal lines markets, and I am particularly encouraged by the support received from our broker partners.

“The skill, commitment and agility of our people as we shape our business for the future, alongside managing the shorter term demands of a challenging market, makes me particularly proud and provides the stimulus that allows us to make such positive strides forward.”

Claims costs in motor returned towards pre-Covid levels by the end of the third quarter.