Ageas makes cutbacks in competitive commercial lines market

New Ageas chief executive Andy Watson told Insurance Times that the insurer’s commercial business has not been performing as hoped and the combined operating ratio (COR) is “some way off” the sub-100% target he is aiming for.

The competitive nature of the commercial marketplace in the UK has led Ageas to take action and cut back on some of the people they write business with and the distributors they use.

Speaking in his first interview since replacing Barry Smith, Watson said: “We have been reviewing where we are writing business and through which distributors we’ve been writing business. We’ve made some changes to that over the last couple years and we’ve put some pricing changes through.”

However, Watson was keen to point out that remedial action was improving the business and was hopeful of returning to growing premiums once the COR was under control.

“We have grown our commercial account over recent years, but in a similar way to some of our competitors the COR for our commercial book is not where we want it to be,” he said. “Over the last couple years we have prioritised reducing the COR relative to growing that account. The COR on our commercial lines account is in a much better place relative to a year or 2 years ago, so the action plan is having the desired effect.”

“As we bring the COR down, and provided the market conditions were right, it is an account that we would look to grow,” he added.