111% commercial motor COR blights an otherwise good year for insurer
Groupama UK chief executive François-Xavier Boisseau says commercial motor business “really needs shaking up” after his company posted a 2011 combined ratio of 11% in the business line.
Commercial motor was a blight on an otherwise good year for Groupama UK. The group-wide combined ratio was a profitable 98% and profit before tax and amortisation was up 84% to £43.5m (2010: £23.7m).
Boisseau pointed out that Groupama’s commercial motor performance was in line with its peers, whose combined ratios in the line ranged from 105% to 113%.
“That range is unacceptable,” he said. “We have taken drastic action. We are prepared to shed as much premium as we need to achieve a decent ratio and I can only urge my colleagues in other companies to do the same.”
Commercial motor business is suffering from the same troubles as personal lines - rising bodily injury claims. Boisseau says the experience in commercial lines has lagged personal lines because pricing deteriorated later. He blames the spread of the problems to commercial motor on a lack of communication between personal lines and commercial lines underwriters.
Boisseau was reluctant to comment on the ongoing sale of Groupama UK because its French parent company, Groupama SA, is managing the process. However, he said: “A lot of people have expressed interest and it is taking its course.”
Asked to comment on a possible completion date, he added: “The group is taking its time to make sure it maximises the value because they are quite a few possible combinations.”