Ageas UK reports on third quarter results
New deals improve income; good Motor performance compensates for weather events
- Overall income was up when compared with the same period last year mainly due to new deals across Household and non-motor Commercial lines.
- Motor income reduced for the first nine months of 2020, reflecting the impact of lower mobility on volumes; disciplined underwriting rating action taken at the start of the year in response to claims inflation; and a subsequent reduction in pricing at the end of the first quarter in response to customers driving less.
- The combined ratio and net result over the third quarter benefitted from lower claims frequency and strong prior year releases, mainly in Motor. This compensated for the impact of the adverse weather recorded in the summer and earlier in the year, and sector wide claims inflation. Motor claims frequencies started to rise again in the quarter as the summer months saw closer to normal driving patterns.
- Flood and storm events in August resulted in £7.4m impact on Household and Commercial non-motor partly offset by favourable weather reserves from the events in the first half of the year.
- Fitch Ratings affirmed Ageas Insurance Limited’s ‘A+’ Insurer Financial Strength Rating with a Stable Outlook (12 November 2020).
Continued focus on core business
- In October Ageas announced the sale of its majority share in Tesco Underwriting to Tesco Bank in a transaction that is expected to conclude in the second quarter of 2021. The sale of this business allows Ageas UK to focus on its core business via the broker and direct distribution channels.
- Building on its commitment to the broker market, Ageas this quarter announced a new five-year agreement to partner with PIB Group in writing its Tenant Risks schemes. The overall deal is worth in excess of £40m over five years and Ageas took over underwriting the scheme on 1st November 2020.
Committed to stakeholders despite weather and pandemic challenges
- Ageas continued to offer its full range of services throughout the pandemic, maintaining a high-quality service to its customers, evidenced by its Net Promoter Score and Net Ease Score, with 80% of customers saying Ageas’s people are friendly and supportive and 74% saying it was ‘easy to report a claim’.
- Vulnerable customers, including key workers, have their claims prioritised to ensure their homes are secure or they are kept mobile during the lockdown restrictions.
- Reflecting the needs of customers, flexible cover and payment options were put in place including waiving midterm adjustment and cancellation fees, offering payment deferrals to support customers in financial difficulty, and providing refunds on annual travel insurance policies.
- Despite the challenges of the weather events and pandemic, Ageas achieved ‘Claims Team of the Year’ at the Insurance Times Claims Excellence Awards.
- No Ageas employees have been furloughed during the lockdown periods and Ageas has not benefited from any of the Government schemes.
- Ageas UK has provided financial support for communities, including Age UK, Rays of Sunshine, the ABI COVID-19 Support Fund, and the Chelsea & Westminster Hospital COVID-19 treatment trials.
|In GBP million||9M 20||9M 19||Change|
|Results after Tax (incl. TU)||47.7m||58.2m||(10.5m)|
|Gross inflows (Ageas UK only)||945.3m||929.7m||+15.6m|
|COR (Ageas UK only)||94.6%||97.0%||2.4pp|
2019 result included a one-off benefit from the Ogden Personal Injury rate adjustment
|Product||Household||Motor||Travel, Commercial & Other||Total|
|Period||9M 20||9M 19||9M 20||9M 19||9M 20||9M 19||9M 20||9M 19|
*Before internal adjustments for quota share and loss portfolio agreements
Commenting on the performance Ant Middle, who took over as CEO Ageas UK in June, said:
I’m pleased to report that our underlying performance was healthy in the quarter. While we have seen lower motor claim volumes compensating for weather events, claims did increase over the last three months but are not yet back to pre-Covid levels. It is still early days to assess the impact of the new restrictions, although traffic volumes are visibly higher than in the first lockdown.
As I reflect on the quarter and the ongoing unique circumstances, I’m immensely proud of the continued resilience of our teams and their work in looking after each other, our customers and distribution partners. Our caring customer response continues and is evidenced by our strong NPS scores, positive broker feedback and recent industry recognition.
We now look ahead to the remainder of the year in the knowledge that we will need to remain agile and responsive to a dynamic set of circumstances, but confident that our work through the year sets us up well to continue to serve brokers, partners and customers in the manner they would expect of us.