Nine-month figures reveal £9m profit after £21m loss and underwriting improvements

Groupama Insurances, the non-run-off business of Groupama UK, has moved into profit for the first nine months of 2003, according to managing director François Xavier Boisseau.

Boisseau said that Groupama Insurances made a profit of £9m

in the first nine months of 2003 compared to a loss of £21m in the 12 months of 2002. He added that the underwriting ratio had improved from 68.3% in 2002 to 60.3% in the first three quarters of 2003, and that the combined ratio had improved from 107.3% to 100.8%, respectively.

While the profit was encouraging, there was much to do in meeting the expectations of the group, said Boisseau. "Our return on equity is 5%-6%, while the group target is closer to 10%," he said.

Boisseau said that Groupama Insurances (the run-off, large commercial business is called Minster Insurances) will again have a gross written premium (less treaty) of around £600m for 2003, of which £450m is personal lines, £80m commercial lines and £70m health.

Groupama Insurances would aim to double its commercial book in three years and increase by 20%-25% in 2004, said Boisseau. "We are really looking at the small SME," he said.

Boisseau claimed the company could handle the increase in size of its commercial book without much trouble. "We have good underwriting experience from our past commercial operations and are left with a claims operation that is slightly oversized. This will be able to accommodate the increase in volume."

Another piece in Boisseau's jigsaw is distribution. "We need to get closer to our customers," he said.

He added that Amanda Blanc, whom Boisseau poached from his former employer AXA, joins in a week and will develop relations with the 300-400 brokers targeted by the company.

Profits would come from reducing dependency on private motor and by cutting costs, said Boisseau. He explained that costs would reduce next year, because two costly IT projects were about to end.

"From 1 January, all new business will go on one system, Prostar, and we have finished building our extranet offering," he said.

He said that by the end of 2004, all policies would be on Prostar. "Our management information will be excellent and we will be able to make better decisions," he added.