Improvement comes despite dip in revenues and motor underwriting performance

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Insurer Ageas UK made a net profit of £19.4m in the first quarter of 2013, up 38% on the £14.1m it made in the same period of 2012.

The combined ratio improved by 2.4 percentage points to 99.9% (Q1 2012: 102.3%).

The improved performance came despite a 0.3% dip in total revenues to £511.3m (Q1 2012: £512.9m), a halving of Tesco Underwriting’s profits and a 3.8 point deterioration in Ageas’s motor combined ratio to 101.8% (Q1 2012: 98%).

Ageas attributed the improvement to its continued desire to maintain pricing discipline, particularly in motor, a “prudent” approach to protecting against weather events, a decrease in weather losses and the inclusion of Groupama Insurances in the results, which Ageas bought last November.

Ageas UK chief executive Andy Watson said in a statement: ““It’s pleasing to see the strong rise in our profits and an overall improving performance in our combined ratio, in what is typically a tough first quarter for the industry. Our acquisition of Groupama Insurances is beginning to have a positive impact on our result and the integration process is going well.

However he added: “There are some market-wide challenges, particularly in motor, where premiums are reducing, which is having affecting income.”

Ageas Insurance

Ageas UK’s main non-life division, Ageas Insurance, boosted first quarter 2013 net profit by 47.1% to £13.1m (Q1 2012: £8.9m).

Ageas said the division’s performance was helped by its focus on writing profitable business and relatively benign weather in the quarter, compared with previous years.

Total gross written premium at Ageas Insurance fell 9.2% to £272.5m (Q1 2012: £300m).

Motor GWP, which includes private car and commercial vehicle, fell 4.3% to £168.2m (Q1 2012: £175.7m). Ageas said this was because the division had maintained its pricing discipline as motor prices fell.

Household GWP fell 7.8% to £68.6m, (Q1 2012: £74.4m) as the company maintained prices for severe weather.

There were also reductions in travel and commercial GWP as the company continued to focus on profitability.

Groupama Insurances

The recently acquired Groupama Insurances contributed £70.2m to GWP and £2.5m in net profit to Ageas UK’s results in the first quarter of 2013. Ageas said the plan to integrate the company is on track and progressing well. The Groupama Insurance Company name is being phased out by the end of 2013 in line with the agreement with the company’s former parent, Groupama SA.

Tesco Underwriting

Tesco Underwriting’s profit halved to £1.3m (Q1 2012: £2.6m), which Ageas said reflected lower volumes, an increase in motor claims linked to bad weather conditions in January and lower investment income.

Tesco Underwriting’s GWP fell 31% to £99.7m (Q1 2012: £145.5m), which Ageas said reflected continuing strong competition in motor.

It added that Tesco Underwriting is focusing on maintaining pricing discipline and improving its business mix, including a stronger focus on lower-risk Tesco Club Card customers.

Tesco Underwriting is a joint venture with Tesco Bank, of which Ageas owns 50.1%.


Ageas’s retail broking companies boosted their net profit by 9% to £6.3m (Q1 2012: £5.8m). However, revenues dipped 9% to £47.7m (Q1 2012: £52.3m) reflecting a “tough and highly competitive environment”.

Ageas UK Q1 2013 results in £m (compared with Q1 2012)


  • Total: 511.3 (512.9)
  • Non-life: 442.4 (445.5)
  • Other insurance (including retail): 47.7 (52.3)
  • Life protection: 21.2 (15.1)

Net profit

  • Total: 19.4 (14.1)
  • Non-life: 16.8 (11.6)
  • Other insurance  (including retail): 3 (2.6)
  • Life protection: -0.4 (-0.1)

Ratios (%)

  • Total COR: 99.9 (102.3)
  • Motor COR: 101.8 (98)
  • Household COR: 90.6 (111.6)
  • Accident and health COR: 98.8 (103.4)
  • Commercial and special risks COR: 107 (112.5)