It was a day of mixed results for Belgian insurance giant Ageas when reporting its UK earnings for the first half of the year.
With a net profit of £27.1 million, the company slipped slightly from its £29.5 million net profit for the same period in 2015. The year on year decrease was primarily blamed on the impact of storms and flash floods during June, as well as other weather-related claims during the quarter.
In addition, the company’s consolidated UK combined ratio rose to 100.1% (6M 2015: 98.6%), which includes a 2.0% impact from the June flash floods and storms. Motor continued to improve year on year to 97.9% (6M 2015: 103.2%), driven by price increases and a lower expense ratio. The household combined ratio was 101.7% (6M 2015: 87.0%), however, reflecting the weather-related claims. The combined ratio of commercial lines and special risks was 107.7% versus 97.9% at 6M 2015. The company stated that this reflected significant prior year releases in 2015, compared to 2016, and the performance of an MGA scheme that was put into run-off in the second quarter of 2016.
On the positive side, Ageas enjoyed a 5% increase in gross written premiums primarily driven by its motor book – its GWP stood at £922.3 million compared to £881.3 million in the same period during the previous year.
In addition, the company has been able to retain its high ratings with an A from Standard and Poor’s and a strong A+ from Fitch, prompting a positive outlook from Ageas UK chief executive Andy Watson.
“Despite the impact of the flash floods and storms in June, and the weather related claims in the first quarter, we’ve continued to deliver a strong and profitable performance predominantly as a result of further increasing the number of motor customers we insure year on year,” he said. “We’re also pleased to see the benefit of new schemes in the broker channel in both household and commercial lines.
“Our strategy is very much centred on the customer and we continue to challenge ourselves to come up with innovative ways of meeting their needs. Last week we announced the launch of Back Me Up, a new and disruptive digital proposition designed by millennials for millennials. This is an exciting extension to our direct brands, responding to the latest trends within this age group and further extending our footprint.
“Furthermore, we are delighted that we have once again been awarded ‘ServiceMark’ accreditation by the Institute of Customer Service. This is a true measure of the effort the team at Ageas put in to ensuring our customers are at the heart of everything we do.”
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