Weather pushes Ageas UK into £25m loss

No comments

Results also hit by one-off start-up and acquisition costs

Ageas UK has made a loss before tax of £24.8m for the full year of 2010 thanks to weather claims and one-off costs.

The insurer posted a combined ratio for the year of 109.5%.

The bad weather at the beginning and end of 2010 resulted in total weather-related claims costs of £57.7m for 2010, compared with £10.7m in 2009.

The loss also reflects one-off start-up costs from the partnership with Tesco Bank, acquisition costs for Kwik Fit Insurance Services and an impairment charge in the protection business.

Excluding bad weather and one-off costs, Ageas UK would have made a profit before tax of £51.5m, an improvement over the £17.3m made in 2009. The combined ratio would also have improved to 103.8% in 2010 from 108.1% in 2009.

Despite the loss, Ageas UK reported strong revenue growth. Total income was up 27% to £1.04bn. Within this, non-life gross written premiums increased 25.7% to £1.01bn and annual protection premiums grew 52.3% to £22.7m. Inflows from Ageas’s retail brokerage business were up 47.8% to £144.8m.

The partnership with Tesco, launched in mid-October, has brought in £86.6m of gross written premium.

“The fundamentals of our business are strong and good progress has been made in the delivery of our strategy to increase the breadth of our products through different distribution channels,” said Ageas UK chief executive Barry Smith in a statement. “We delivered record levels of income in 2010 topping the £1 billion mark for the first time, as well as successfully integrating Kwik Fit Insurance Services and launching the Tesco Underwriting business on time and to plan.”

However he added: “Like the majority of the industry, we have not been immune to the exceptional weather that struck last year and this has adversely impacted our result which is clearly disappointing. We also had significant one-off costs to support our growth. Without these combined costs, our profits would have increased well above 2009 levels.”

Ageas UK 2010 highlights in £m (compared with 2009)