Combined operating ratio for the full year 2014 improved by 1.8 percentage points to 97.1%
AXA UK and Ireland’s general insurance business reported a fourth consecutive year of double digit earnings growth as its underlying profit rose by 40% to £250m (2013: £178m)
Its combined operating ratio (COR) for the full year 2014 improved by 1.8 percentage points to 97.1%. (2013: 98.9%).
The current year COR improved by 0.7 percentage points to 97.5%. The current year excludes any movement in reserves.
Revenues also rose by 3% to £3.8bn in 2014 – a turnaround from the previous year when revenues fell 1% to £3.7bn in 2013.
Revenues in the commercial lines business, excluding healthcare, and UK direct motor each grew by 8%.
The commercial business now exceeds £1bn of gross written premium at a current year COR of 94.6%. The direct motor business reported a current year COR of 97.7%.
AXA UK and Ireland Group chief executive Paul Evans attributed the results to an improvement in the quality of underwriting but he warned that markets remained tough, adding that that there were clear signs that premium must soon increase in some sectors.
“Whilst every effort is made to reduce costs and claims fraud so as to keep premiums down, there are clear signs that premium rates must soon increase in some sectors.
“For example, with the still-anticipated benefits from personal injury reforms reflected fully in reduced motor premiums, premiums must surely rise this year to take account of the increasing frequency of accidents that can already be seen from increased car usage as lower fuel costs and the wider economic recovery take effect – both here and in Ireland.”
The insurer now plans to develop its next five-year plan to 2020.
Evans added: “This will be an exciting period during which time business models must evolve to respond to developing customer needs and ways of doing business.
“Never has it been more important to place the customer at the heart of everything we do – as we’ve already demonstrated.
“Our business practices will continue to be reformed to earn the trust of our customers, we will also develop new propositions that engage the customer beyond the normal touch points of purchase, renewal and claim and will responsibly harness customer data to provide truly bespoke products, services and experiences.”