Profitable start for Ageas UK
Ageas UK has revealed a net profit of £12 million and an overall combined ratio of 99.4% for the first quarter of 2015.
Total income for the period was £459.1 million with total non-life gross written premiums (GWP) of £418.4 million. According to the insurer, its total income reinforces disciplined underwriting approach in competitive market conditions.
Motor (private car and commercial vehicle) income was £190.3 million, ‘where Ageas has continued with targeted rate increases against a market where premiums are down two per cent over the last quarter of 2014, but slightly up year-on-year’. The insurer’s motor ratio deteriorated to 103.6% (3M 2014: 101.6%) as a result of a higher frequency of accident claims linked to increased traffic volumes combined with third party damage average costs. Targeted pricing action continues to be taken to correct this.
As the business continues to improve the performance of the Commercial book, the total Commercial lines ratio including commercial motor also delivered a sub 100% performance at 82.1% (3M 2014: 113.7%).
Ageas has around eight million customers across its businesses in the UK and insures 3.6 million motor policies.
Tesco Underwriting, the Motor and Household insurance partnership with Tesco Bank, of which 50.1% is owned by Ageas, generated GWP of £94.8 million during the period. Competitive market conditions led to lower new business volumes across both motor and household in the first quarter. The net result of Ageas’s interest in Tesco Underwriting made a profit of £1.5 million.
Andy Watson, chief executive of Ageas UK, commented, ‘It’s been a profitable but challenging first quarter, with competitive conditions continuing in both the home and motor markets as a result of low premiums. In commercial lines however we’ve seen a good performance where we’re further evolving our proposition for open market, digital trading and schemes business. At the same time we’re continuing the integration of our two insurance businesses, which is scheduled for completion by the end of the year, and are progressing with our new Ageas Retail strategy. Investment in our partnerships business continues to deliver success with two new deals secured with Virgin Money and Volkswagen Financial Services.
‘Our commitment to delivering excellence customer service continues to receive significant industry recognition evidencing our desire to do the right thing for our customers.’