Half Year Statement

Summary

Increased year on year profit reflects benign weather impact and one-off Ogden rate benefit

  • Net profit of £45.4 million compared to a profit of £26.8 million (HY 2018)
  • Combined ratio improved to 96.9% (HY 2018: 99.0%)

 

Gross income reflects deliberate action to improve profitability, but with signs of growth

  • Income of £769 million compared to £810 million (HY 2018)
  • Motor income for the discrete second quarter increased to £210m (Q2 2018: £207m)

 

in GBP million

HY 19

HY 18

Change

Q2 19

Q2 18

Change

Q1 19

Net result

45.4

26.8

71%

36.0

17.4

107%

9.4

Gross Income

769.2

810.1

(5%)

398.5

416.8

(4%)

370.7

Combined ratio

96.9%

99.0%

-

98.3%

97.3%

-

95.5%

  

Ageas UK entities

Motor

Household

Other lines

(inc. accident & health)

Total

in GBP million

6M 19

6M 18

6M 19

6M 18

6M 19

6M 18

6M 19

6M 18

Gross Income

403.9

405.6

129.8

140.4

75.8

89.2

609.5

635.2

Combined Ratio

98.8%

90.6%

90.3%

116.1%

98.6%

108.5%

96.9%

99.0%

  

Andy Watson, Chief Executive of Ageas UK commented:

As we progress through the year we remain focused on profitability. We held firm on our reserving assumptions in anticipation of the Ogden rate change and as a result have now realised the one-off benefit following the decision by the Lord Chancellor to set this at -0.25%.

Benign weather in the first half of 2019 along with our strategic exit from underperforming schemes also meant that the underlying Household and Commercial lines performance was good.

This is partially offset by restructuring costs with the long term view of improving the efficiency of our business. The result is also offset by claims inflation combined with our large loss experience in motor linked to an increase in severe third party injury claims.

At the beginning of the year I talked about returning our business to growth. At half year, income levels continue to reflect our disciplined approach to pricing in soft market conditions, as well as our exit from underperforming schemes. The gap, however, is starting to narrow and we have seen motor income increase year on year in the last quarter.

We’re making good progress in the broker channel with a number of new deals coming to fruition later this year. These deals are evidence of the strong relationships we have in this market, the desire for brokers to work with us as their strategic partner, and our appetite to help them grow. We also continue to see growth in our direct channel, in particular on the aggregators where customers can now buy Ageas branded car insurance.

Looking ahead, we aim to maintain the momentum on our plans to grow across our channels, while modernising through improved digital and data developments that will enhance our overall customer experience.