Bad weather, motor claims and Tesco set-up costs blamed
Fortis has announced Q1 total life and non-life GWP rose 18.4% to £234.9m (Q1 2009: £198.4m) with non-life GWP up by 16.8% to £230.5m (Q1 2009: £197.4m).
But it made a net loss of £1.8m (Q1 2009 net profit £4m) due to severe weather events in January, rising claims in private motor, one-off set-up costs related to the new Tesco Bank partnership and lower realised capital gains.
Fortis claimed strong growth in commercial lines with sales up 77%. Increase in total Broker Income for retail businesses of 6.2% to £25.6m (Q1 2009: £24.1m). And it claimed a stable net profit of £3.1m in Other Insurance activities. The combined ratio was 110.2% (Q1 2009: 108.9%).
Barry Smith, chief executive, Fortis UK said: “Our business continues to deliver strong growth, particularly in Commercial lines, Protection and retail activities reflecting the attractiveness of our high service, low cost proposition and our desire to broaden and deepen our product range.
“Across the industry, profitability has been hit by increasing claims in the private motor market and severe weather events. However, private motor ratios are where we expect them to be in the current market cycle and thanks to our controlled underwriting discipline, we anticipate improvements by the end of the year.”
Growth in the Personal lines business included an increase in the Household and Travel books to £57.7m and £13.3m respectively (Q1 2009: £45.0m and £9.6m). Private car GWP was broadly in line with the prior year at £117.8m (Q1 2009: £119.4m).
Fortis UK’s retail operations, RIAS and Fortis Insurance Solutions, saw a 6.2% year on year increase in income to £25.6m, driven by good performance on renewals, add-on income and growth in partnership income, building on the healthy pipeline of partnership opportunities secured by Fortis in 2009.
Net profit for total Other Insurance activities was stable at £3.1m in the first quarter, despite pressure on retail margins and additional investments associated with the take-up of new schemes.