Weather losses push combined ratio to 100.2%, masking motor improvements
AXA UK and Ireland made an underlying profit of £134m in 2012, up 86% on the £72m it made in 2011.
General insurance revenues increased by 2% to £3.8bn, despite an 11% reduction in motor insurance following efforts to improve profitability.
AXA said motor profitability improved in 2012 thanks to pricing and risk selection in its direct motor business, most notably Swiftcover.
But it added that improvements in motor and elsewhere were masked by flooding and storm damage claims, which pushed the current year combined ratio up 0.8 percentage points to 100.2%.
The current year combined ratio excludes the effects of reserve strengthening and releases. AXA UK did not provide an all-year combined ratio.
‘Substantial progress’
AXA UK and Ireland chief executive Paul Evans said: “The transformation of the competitiveness and profitability of AXA’s businesses in the UK has made substantial progress. Investments in new products and distribution channels, enhanced service to customers and brokers and operational efficiency have resulted in strong revenue growth, across the majority of the portfolio, and improved profitability.”
The 11% dip in motor revenues was offset by a 5% growth in sales of products through brokers, and 9% growth in sales of commercial insurance, home, travel and private medical insurance respectively.
Evans added: “I am very pleased with the progress we have made over the past year. Economic conditions, both here and in Europe, will remain challenging in 2013 and beyond, and we will keep a resolute focus on efficiency and delivery for customers across all areas of our business in order to build on these results.”
Group results
The AXA group as a whole posted a 2012 profit of €4.15bn (£3.6bn), down 1% on the €4.1bn it made in 2011.
Revenues increased 5% to €90.1bn (2011: €86.1bn).
The all-year combined ratio, including the effects of reserve movements, improved by 0.3 percentage points to 97.6% (2011: 97.9%). The current-year combined ratio improved by 0.8 points to 98.8%.
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