Significant improvements in performance

  • Profit before tax and minority interests up 36.4% to GBP 106.7 million  (9M 2011: GBP 78.3 million)
  • Overall combined ratio at 98.6% (9M 2011 99.9%)
  • Motor combined ratio shows continued improvement to 96.7% (9M 2011: 98.2%)

Continued stable inflows

  • Total income up 0.9% to GBP 1,535.7 million compared to 9M 2011
  • Non-Life Gross Written Premiums (GWP) stable at GBP 1,328.1 million
  • Total inflows from Retail businesses slightly down on last year at GBP 157.9 million 
  • Protection GWP up 58.8% to GBP 49.7 million 

Well capitalised business 

  • Strong capital positions maintained in Ageas Insurance Limited, Ageas Protect and Tesco Underwriting 

Groupama Insurance Company Limited acquisition on track 

  • Completion expected during fourth quarter
  • Will increase breadth and depth of broker product offering
  • Fits with strategy to grow and to offer Ageas Insurance and Groupama products across broker base 

Announcing the nine months 2012 results, Barry Smith, Chief Executive of Ageas UK commented:

“To deliver record year-to-date profit in such economically challenging conditions is very pleasing.  Following the significant scale change of the Ageas businesses over the last few years, growth continues in our most profitable segments.  When the acquisition of Groupama UK is completed, the addition of their insurance activities will ensure we can offer even greater product choice to our brokers and clients.  I’m also delighted that our people continue to be recognised for delivering customer service above market norms with a number of awards won during the period.  Our low cost, high service ethos remains very important to us and this focus will continue.”

Business Results

Ageas UK

Ageas UK continues to deliver a strong performance, reflecting a clear and consistent multi-distribution strategy and partnership approach with brokers, affinities, Independent Financial Advisers (IFAs), intermediaries and through our own Retail businesses.  The combination of high quality service and low cost delivery remains a key area of focus for all the Ageas UK businesses. 

Profit is at record levels for the nine month period with growth now normalising following significant scale change over the last few years.  Total income reached GBP 1,535.7 million with overall profit, pre-tax and minorities, increasing by 36.4% to GBP 106.7 million (GBP 78.3 million 9M 2011).

Ageas UK also announced during the period that it has signed a deal with Groupama SA to acquire its insurance business in the UK, Groupama Insurance Company Limited.  Subject to regulatory approvals expected in the fourth quarter, the deal will propel Ageas to the fifth largest General Insurer in the UK , adding a wider range of complementary products for its strong broker base. 

Ageas’s award-winning track record continued, with the business picking up a number of accolades in the third quarter including motor repairer trade body ABP’s ‘Insurer of the Year’ for the fourth year running, the ‘Underwriting Initiative of the Year’ at the Insurance Fraud Awards and being voted top by brokers of the Insurance Age Sentiment Survey for both Personal lines claims and underwriting service.  In addition, the Ageas Insurance underwriting team were awarded Chartered Status by The Chartered Insurance Institute.


Ageas Insurance Limited

Ageas Insurance’s focus has continued to be on expanding profitable business, particularly in Motor (Private Car and Commercial Vehicle) and taking pre-emptive actions to protect its result in other areas such as Household.  This has led to a significant increase in profitability.   

Total Gross Written Premiums (GWP) during the first nine months of 2012 increased by 3.8% over the same period in 2011 to GBP 854.0 million (9M 2011 GBP 822.5 million). 

There was good growth in Motor (Private Car and Commercial Vehicle) where income was up 15% to GBP 489.7 million (9M 2011 GBP 425.9 million). Household income decreased by 9.7% to GBP 209.2 million (9M 2011 GBP 231.6 million) due to deliberate pricing action taken to improve profit performance.  The Travel account was down to GBP 34.9 million (9M 2011 GBP 49.2 million), with Commercial and special risks GWP increasing by 3.8% to GBP 120.2 million (9M 2011: GBP 115.8 million). 

Ageas has continued its consistent approach of pricing its Motor business to reflect the underlying risk. These actions have led to positive results on Ageas Insurance’s Motor combined ratio which has improved to 94.0% (9M 2011 96.4%).  By way of comparison, recent research from Deloitte has shown that the industry average Motor combined ratio at the end of 2011 was 106.1%.

The positive outcome of the actions taken in both Motor and Household is that profit before tax for Ageas Insurance Limited increased by 52.2% to GBP 63.7 million (9M 2011: GBP 41.8 million).

Tesco Underwriting: 

Tesco Underwriting, the Motor and Household insurance partnership with Tesco Bank, of which 50.1 per cent is owned by Ageas, generated GWP of GBP 474.1 million during the period (GBP 504.5 million 9M 2011) and a profit before tax and minorities of GBP 28.8 million (9M 2011: GBP 11.1 million). 

Life Protection:

Ageas Protect continued to make good progress, with total GWP inflow increasing by 58.8% to GBP 49.7 million (9M 2011 GBP 31.3 million) and New Annual Premiums reaching GBP 25.6 million (9M 2011 GBP 22.9 million).

This continued growth reflects the successful roll out of the company’s Protection proposition to an increasing number of IFAs, financial intermediaries and new affinity partnerships.  The business now has over 245, 000 customers, an increase of 40.0% over the same period last year and has over 7.0% share of the IFA market. Growth in the Protection business has been heavily driven by its award-winning approach to underwriting and technology, high levels of service and product innovation. 

In line with its continued development since launch in July 2008, the business was at a near breakeven position at GBP (0.3) million compared to a loss in the same period last year of GBP (1.6) million.

Other Insurance Activities:

Ageas UK’s Other Insurance activities, which principally comprise the Retail companies, delivered income slightly below last year despite a tough and highly competitive environment.  Ageas Retail consists of RIAS, Kwik Fit Financial Services (KFFS), Ageas Insurance Solutions (AIS) and Castle Cover, all of which strengthen Ageas’s overall distribution and manufacturing mix. Total inflows were GBP 157.9 million (9M 2011: 163.4 million) and profit before tax for the Retail businesses was GBP 24.9 million (9M 2011: 29.8 million), a resilient performance in tough trading conditions and including GBP  2.3 million of costs relating to the consolidation of Kwik Fit’s activities into its Glasgow site.  Total profit before tax for the Other Insurance activities was GBP 14.5 million (9M 2011: GBP 27.0 million), with last year’s result including an incentive payment of GBP 7.5 million from a partner.