Insurer to take corrective action on large motor losses
Ageas UK plans to grow its commercial business selectively despite it posting a 111.2% combined operating ratio in the first half of 2014.
The commercial COR was 7.5 percentage points worse than the 103.7% the company reported in last year’s first half.
However Ageas UK chef executive Andy Watson said that the 111.2% COR was “a bit of a false figure” because it contains a lot of the one-off costs relating to the Groupama acquisition.
The underlying COR, Watson said, “is still north of 100% but not very much north of 100%”.
He added: “We have had a commercial action plan running for some time. We have got the COR down to something we find much more acceptable, so we are looking not only to keep the COR for commercial in an acceptable range but we are looking to grow that account where it is sensible to do so.”
Ripe areas for commercial growth included commercial motor, some schemes and e-traded business, which the company believes is “where we think we can write more business and write business at an acceptable level of profitability“, Watson said.
Another area where underwriting profitability deteriorated was Ageas UK’s motor book, where the COR rose by 2.6 points to 99.6% (H1 2013: 97%).
Watson said that, as highlighted in the first quarter, the motor business was hit by several large losses, and following a review the company is now planning to correct this.
Watson said: “We have seen more large losses than we would be comfortable with in the over-70s segment, so we have taken some pricing and underwriting action there.”