UK boss Middle lifts lid on Ageas's restructure and job cuts

Ant Middle

Ageas's Ant Middle and Adam Beckett discuss the provider's strategy change in response to shifts in customer behaviour, and the FCA's dual pricing ban, as the insurer aims to hit £1.5bn in GWP.

Ageas UK is undergoing a restructure to become a more “focused” organisation, according to chief executive officer Ant Middle.

He explained that this includes looking at the shape of the business and investing in automation and technology in response to changes in customer behaviour.

Ageas confirmed last week that it is set to make redundancies in its Bournemouth office as a result of the restructure.

Middle told Insurance Age: “As part of our strategy, we have announced the start of a consultation with some of our employees about the future of their roles. The proposed restructure reflects the current and future needs of our business and our customers, and enables us to really focus our efforts on competing and winning in our chosen markets.

“As with any restructure, this news will be unsettling for our people, and I would simply wish to underline that I greatly value the professionalism of everyone at Ageas as we work through this process together.”

Personal
Middle became CEO of Ageas UK last June after previous boss Andy Watson left the business to focus on further education and non-executive roles.

He explained that when he took over he wanted to take a step back and consider how to take the business forward.

“We have an ambition to take the business from the £1.2bn we have today to £1.5bn over the next four years, improve our combined operating ratio to 95% and build on the strengths we have in terms of the reputation we have with brokers, customers and our people,” Middle commented.

He added: “Our long heritage is in writing personal lines business with brokers and that’s where the majority of our business is today.

“Building that business with brokers has been important to our history and will continue to be an important part of our future.”

According to Middle, Ageas will continue to focus on personal lines, which makes up 85% of the business.

Commercial
However, the provider has also recently restructured its commercial lines and non-standard proposition, creating a commercial lines business unit led by managing director Stephen Linklater.

“He’s got a very clear brief to maximise the value of our commercial business unit portfolio and leave no stone unturned in doing so,” Middle noted.

He added: “We believe there is lots of opportunity to improve the performance of our commercial business unit portfolio.

“We’re targeting a 95% COR across the whole of our business, but we believe that we should be delivering an even better return from the commercial portfolio.”

Restructure
Ageas UK underwent a significant restructure as recently as in 2018 when it moved to a centralised functional structure working across its three core channels of broker, partnerships and direct to consumer.

The move saw the business enforce a redundancy programme as it closed its offices in Stoke-on-Trent and Port Solent.

At the time, the provider stated that this was prompted by both the reduction in demand from customers wanting to buy insurance over the phone and the increased business efficiency created by its drive to simplify its structure and invest in technology.

Adam Beckett, who joined Ageas from Aviva at the start of this year, taking up the role of chief distribution officer, explained that the insurer is looking to embrace machine learning across the business.

“We’re going to invest in the technical engine room – sophistication in pricing, underwriting and fraud, in the risk selections we’re making via underwriting and how we’re handling claims,” he stated.

Adding: “A lot of people think AI and machine learning is rocket science but what we’re trying to do is democratise it, make it available for all of the distribution partners that we work with.”

However, he highlighted that the restructure will not see Ageas shift its focus away from brokers.

“The strength of relationships Ageas has with its brokers is a very powerful asset for us and our distribution partners,” he noted.

Dual pricing
The personal lines insurance market is currently going through additional changes, including the Financial Conduct Authority’s ban on dual pricing, which comes into force in January 2022.

Middle stated that Ageas is “confident” that it will have everything in place in time for the rules change, adding: “We are supportive of the changes, we do think that at the heart of the new pricing rules, the ultimate aim is the right one and we wholly support that.

“It’s good now to have the clarity that the FCA has brought in the last month or so and we are working through the detail of that.”

He explained that the provider has had a team working on this in anticipation of the final rules for the last two years.

The regulator launched its market study into general insurance pricing in 2018 after charity Citizens Advice issued a super-complaint about loyalty pricing to the Competitions and Markets Authority, naming home insurance as one of its five sectors of concern.

Beckett noted that Ageas is currently in a “myriad of conversations” with its brokers and partners in order to work through what the changes will mean.

“There will be a real emphasis on value and there’s lots for us to look at,” he noted.

Beckett concluded: “But there is nothing in the pricing rules that gives us concern for the strategy that we’ve put forward.”

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