Ageas UK has fallen into the red in the first quarter of 2020, not because of the coronavirus pandemic but due to storms Ciara and Dennis.
The two weather events translated to an impact of £23.5 million across the general insurer’s home, motor, and commercial lines of business. As a result, Ageas UK suffered a £2.7 million net loss in the first three months of the year. In the same period in 2019, the firm enjoyed a net income of £12.4 million.
Without weather in the picture, the Ageas Group subsidiary would have posted a combined operating ratio (COR) of 98.7% instead of the actual COR of 107.1%. Broken down into segments, household’s COR in the quarter was 112.3%; motor, 103.5%; and travel & other, 114.5%.
Commenting on the financial results, outgoing Ageas UK chief executive Andy Watson stated: “In times like these, our priority is helping our people and our customers to navigate the unchartered territory we find ourselves in as a society. But as I reflect on the beginning of the year I have many reasons to be proud.”
“We cannot underestimate the impact that the storms and floods had on our customers,” noted Watson, who will be succeeded by Ant Middle next month. “The priority remains to get these customers back in their properties, while operating in very unusual circumstances.
“Only a month later we find ourselves in a pandemic situation and thanks to a quick response, the majority of our people were able to work from home, continuing to provide a fantastic service to our customers and, importantly, ensuring we recognise and keep key workers mobile.”
Meanwhile the departing boss expressed his “huge appreciation” for Ageas UK’s people, intermediaries, and suppliers. Watson also cited the company’s stability and strong solvency position, which he believes will allow the business to emerge from a resilient stance.
“Looking into the second quarter,” he added, “the lockdown has had a varied impact on our product lines. While motor claims frequencies have reduced across the industry, it is still too early to have a clear picture on the overall impact.
“We moved early to reduce our motor pricing to reflect the current situation; we are not applying any inflationary rate increases during this period; and we continue to work with industry bodies and our intermediated distribution channel to ensure we consider all fair options for our customers.”
