Ageas has revealed its net results for the first nine months of the year with the Ogden announcement continuing to take its toll on its UK performance in particular.
Overall, its insurance net result increased by 16% to 686 million euros compared to 591 million euros during the same period last year – albeit this result excluded the Hong Kong operations that were divested during 2016. Indeed, its group net result increased from 118 million euros to 360 million euros.
However, focusing in on the key UK market shows a more testing story. Its net profit of 25 million euros was considerably lower than a net profit of 54 million euros one year earlier; while its combined ratio rose to 103.7%, up from 99.7%.
“In the UK, the results are still affected – as forecast – by the residual impact of the Ogden discount review, but we see an improved performance in the third quarter as a first result of our restructuring plan,” commented Ageas CEO Bart de Smet.
The firm noted that motor inflows reduced to 784 million euros (vs. 844.9 million euros). In local currency they were up 1% however, in what, post-Ogden, continues to be an unpredictable market. Household inflows were 273 million euros (vs. 301 million euros), and down 1% at constant exchange rates. Inflows in other lines meanwhile stood at 135 million euros (vs. 173 million euros), reflecting its planned runoff in special risks.
Elsewhere, business was boosted by performance in the Asia market. Gross inflows amounted to 16.2 billion euros, an increase of 19% (+22% at constant exchange rates) including non-consolidated partnerships at 100%. Higher sales primarily originated in Malaysia, China and Thailand as a result, the company stated, “of successful sales campaigns and continued channel development, including a further increase in the number of agents mainly within China.” India’s growth in the bank channel further contributed to the increase in gross inflows while new joint ventures in the Philippines and Vietnam started off with strong inflows.
CEO de Smet also took the opportunity to comment on the potential Fortis settlement.
“With regard to the potential Fortis settlement, Ageas took an additional provision of 100 million euros which allows us to address the Amsterdam Court of Appeal’s main concerns on the initial proposal,” said de Smet. “In the meantime, the Court has extended the filing period by eight weeks, providing us with an opportunity to continue to work on an amended and balanced agreement together with all parties until December 12, 2017.”
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