Profit fall for Ageas

Ageas has blamed adverse weather on falling profits and a deteriorating COR for 2015.

Its results for 2015 showed that net profit fell to £21.4m from £80.4m in 2014.

The insurer noted weather impacts of £46.1m due to the storms in December and also pointed out that it received a one-off benefit which helped to push the overall underlying result to £61.7m.

Combined operating ratio (COR) deteriorated from 99.8% in 2014 to 102.0% for the full year 2015. Total income also fell from £1.98bn to £1.93bn while non-life GWP dropped to £1.7bn from £1.8bn.

However, the insurer said that Ageas Insurance and Tesco Underwriting had "strong capital positions".

Floods
Announcing the full year 2015 results, Andy Watson, chief executive of Ageas UK said: "Reflecting on 2015, underlying profit was in a good place, but just as our customers were not immune from the storms and floods at the end of the year, neither were we.

"The estimated impact of the December severe weather was significant, but in line with our market share."

Prior to the December weather events Ageas had reported net profits of £43.9m for the first nine months of 2015.

For 2015 the insurer said that motor income increased to £834.3m (2014: £817.2m) and remarked the market had benefitted from rate increases in recent months.

Despite this the motor COR deteriorated to 100.7% (2014: 99.7%) due to "higher frequency of accident claims linked to increased traffic columes, third party damage and adverse weather".

Household income fell to £308.1m from £334.8m and the business said that "significant pressure remains".

COR in this area deteriorated more dramatically to 105.2% from 94.3% impacted, Ageas said, by Q4's poor weather.

Commercial and special risks performance actually improved.

The COR was 103.3% (2014: 110.3%) and inflows increased to £189m (2014: £182.4m) thanks to "encouraging progress" in its commercial lines book, particularly in schemes.

Tesco
Tesco Underwriting, which is 50.1% owned by Ageas, generated GWP of £400.6m (2014: £428.9m) a performance the insurer put down to lower new business volumes, average premiums and competitive market conditions.

Watson continued: "Income was down slightly year-on-year where we've taken deliberate pricing action against competitive market conditions.

"Following an upward trend in motor prices across the market seen towards the end of the year, we've increased the number of motor policies we insure to 3.8 million."

He added: "The home market remains very competitive, but rates are showing signs of going up and we will monitor the impact in response to the weather events. The true premium increases are obscured by the IPT change."

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