Strong growth in inflows

  • Total income up 75.0% to GBP 411.0 compared to same period 2010
  • Non-Life Gross Written Premiums up 74.5% to GBP 402.2 million
  • New Annual Protection Premiums up 23.6% to GBP 6.7 million and Protection GWP doubled to GBP 8.8 million
  • Increase in total inflows for Retail businesses of 98.1% to GBP 50.8 million

Improvements in performance

  • Profit Before Tax up by GBP 7.0 million to GBP 3.8 million
  • Result includes acquisition costs for Castle Cover of GBP 0.8 million and GBP 12.8 million from exceptional prior year Escape of Water claims costs resulting from severe weather at end of 2010
  • Combined ratio including Tesco Underwriting of 106.0% (Q1 2010: 110.2%)
  • Motor ratio including Tesco Underwriting continues to improve to 100.3% (Q1 2010: 111.8%)

Progress in development of multi-distribution and product strategy

  • Strong growth in Non-Life Commercial lines, 23.7% GWP increase
  • Gross Written Premiums of GBP 133.2 million from Tesco Underwriting partnership
  • Number of Protection customers increased by 68% to 135,000
  • Acquisition of Castle Cover consolidates Ageas as the 4th largest Personal lines broker in the UK

Well capitalised business

  • Strong Non-Life capital position in Ageas Insurance and Tesco Underwriting with more than double the FSA minimum in each

Announcing 2011 first quarter results, Barry Smith, Chief Executive of Ageas UK (formerly Fortis),commented:
“We continue to see strong progress in the delivery of our strategy to increase the breadth of our products through different distribution channels. In the first quarter, Ageas UK has delivered a strong combination of high levels of growth coupled with improving profit performance.

In particular, the continued improvement of the Motor result is very encouraging indeed. Also, the addition of Castle Cover to our Retail operations means we have strengthened our distribution and manufacturing mix. Our strong service ethos, which remains of great importance to us, was again recognised by our brokers, IFAs and partners through the awards and service accolades presented to us during the first quarter. This gives us confidence in our ability to continue to develop profitable growth whilst delivering quality service to our customers.”

Ageas UK (formerly Fortis)

Ageas UK’s businesses continue to deliver good results, reflecting a clear and consistent multidistribution strategy and partnership approach with brokers, affinities, IFAs and suppliers. Growth has been seen across the business – in Personal and Commercial lines, Protection and through our Retail companies. The combination of high quality service and low cost delivery remains a key area of focus for all the Ageas UK businesses.
Income is at record levels, taking into account the addition of Tesco Underwriting in Non-Life and the inclusion of Kwik Fit Insurance Services in Ageas UK Retail. In Ageas Insurance, continuing improvement in Motor performance is very encouraging and a like for like comparison with the same period last year has seen a 14.5% improvement in its Motor combined ratio. The impact of the exceptional bad weather at the end of 2010 was felt in the first quarter with higher than anticipated prior
year claims costs of GBP 12.8 million. The total cost of claims relating to the weather events from the last quarter of 2010 was GBP 59.8 million.
Ageas UK’s Retail capability has been significantly strengthened by the inclusion of Kwik Fit Insurance Services and as of 24 March 2011, by the purchase of Castle Cover which increased Ageas’s presence in the fast growing over 50s market segment. Overall profit across Ageas UK has increased by GBP 7.0 million to GBP 3.8 million.
Ageas UK continues to receive strong recognition from brokers, partners, Independent Financial Advisers and suppliers, winning 8 awards and accolades during the first quarter.Recognition received included two Financial Sector Technology Awards for UKAIS; Best Overall Protection Provider, Best Underwriting Team and Best E-Commerce Provider (Lifesearch Awards) for Ageas Protect which was also placed joint first in the Finance & Technology Research Centre’s e-Excellence ratings; while Ageas Insurance was awarded “World Class” status from the Institute of Customer Services for its claims handling approach and was voted best for Personal lines claims service by Insurance Age magazine.


Ageas Insurance Limited

Total Gross Written Premiums (GWP) in the first quarter increased by 16.7% over the same period in 2010 to GBP 269.0 million, driven by the continued development of Ageas’s Personal and Commercial lines portfolios. Growth in the Personal lines business reflected an increase in the Household book to GBP 82.8 million (Q1 2010: GBP 57.7million) whilst Private car and Travel GWP was in line with Q1 2010 at GBP 117.4 million and GBP 13.3 million respectively.
In terms of Private car, Ageas has continued its consistent approach of pricing to reflect the underlying risk, with recent technical rating changes including full postcode rating. These actions have led to positive results on Ageas Insurance’s Motor combined ratio which is now 97.3%, an improvement of 14.5% on the same period last year. Complementing its good Personal lines performance, Ageas saw a 23.6% growth in Commercial lines GWP to GBP 48.2 million (Q1 2010: GBP 39.0 million) as a result of a deliberate strategy to widen its product base and broaden its commercial underwriting footprint across the Small and Medium Sized Enterprises (SME) market, offering high service, low cost propositions that meet brokers’ needs. In particular, there has been strong growth in Commercial Vehicle. Ageas Insurance continues to develop its electronic trading capability making it easier and more efficient for brokers to write Commercial lines business.
Ageas Insurance Limited’s combined ratio was 104.6% (Q1 2010: 110.2% ) which reflected an overall improvement in performance. It also included higher than anticipated prior year Escape of Water claims which added 17.5% to the Household combined ratio during the first quarter of 2011. Profit before tax for Ageas Insurance was GBP 3.9 million, a GBP 9.2 million improvement over the same period last year.

Tesco Bank Partnership:

Tesco Underwriting, the new insurance business with Tesco Bank, of which 50.1 per cent is owned by Ageas, began transacting business in mid October 2010. The business now has 575,000 customers generating GWP of GBP 219.8 million since launch, including GWP of GBP 133.2 million in the first quarter of 2011. This partnership focuses on Motor and Household business.


Ageas Protect (formerly Fortis Life) continued to make good progress, increasing its New Annual Premiums to GBP 6.7 million (Q1 2010: GBP 5.4 million) with total GWP inflow increasing by 101.2% to GBP 8.8 million (Q1 2010: GBP 4.4 million). This continued growth reflected the successful roll out of the company’s Protection proposition to an increasing number of Independent Financial Advisers (IFAs). By the end of 2010, the business had a 6.4% IFA market share. In just its third year of operation, the business now provides cover to 135,000 customers, an increase of 68% compared to the same period last year. Growth in the Protection business has been heavily driven by its award-winning approach to underwriting, market-leading technology and product innovation. In the first quarter, Ageas Protect launched a new Low Start proposition, offering Term Assurance and Critical Illness covers at a lower initial cost to customers to enable them to afford more cover with a limited budget. Launched in response to the current economic climate, Low Start is a new approach to pricing Protection, where typical premiums are 30% less than level annual premiums.
The business, which was launched in July 2008, incurred a pre-tax loss in the first quarter of GBP 0.8 million.

Other Insurance Activities:

Ageas UK’s Retail operations which includes RIAS, Kwik Fit Insurance Services (KFIS), Ageas Insurance Solutions (UKAIS) and from March 24 2011, Castle Cover, continued to trade well in a competitive environment. The Retail operations delivered a 98.1% increase in total inflows to GBP 50.8 million, driven by good customer retention, strong portfolio growth, add-on revenues, good growth from affinity partnerships and the addition of Kwik Fit Insurance Services.
The development of Ageas UK Retail has been significant over the last 12 months with the inclusion of KFIS and most recently Castle Cover. It is part of Ageas UK’s deliberate strategy to strengthen its overall distribution and manufacturing mix, adding nearly 1 million extra customers from different market segments. Castle Cover’s focus in the fast growing over 50s market complements RIAS’ existing expertise and the strengths of both brands will be utilised to deliver further profitable growth to the UK’s Retail operations. Profit Before Tax for the Other Insurance Activities including the Retail businesses was GBP 4.7 million during the period to 31 March (Q1 2010: GBP 4.4 million).