The insurer said that product lines which are exposed to the fallout of the coronavirus pandemic are ‘limited’
Insurer Ageas has recorded a “strong” operational performance in the UK for the third quarter of 2020, reporting €58m (£52m) operational free capital generation.
Published within its latest financial update, the insurer noted that in the UK, inflows increased during quarter three due to new commercial deals, primarily within its household line, while motor inflows remained flat compared to Q3 last year.
Ageas added that both its combined ratio and net result in the UK had benefitted from low claims frequency and strong prior year releases, mainly in motor – this worked to compensate for the impact of the adverse weather recorded during the first quarter as well as sector wide claims inflation.
This trend was mirrored across the group. Ageas said: “The motor claims frequency increased versus the previous quarter, but remained markedly below the level of last year.
”This favourable claims experience offset the impact of the storms which hit Belgium and the UK in early February and led to an excellent combined ratio over the first nine months of 2020 of 90.0%.”
Ageas also used its trading update to flag its sale of the 50.1% stake it had in Tesco Underwriting – announced on 14 October, the total consideration of the sale is €114m.
The transaction is subject to regulatory approval and is expected to close in the second quarter of 2021.
The firm added: “The non-life operational performance continued to improve in most of the products lines across the consolidated entities.”
In the UK, Ageas said that “exposure to claims related to travel, business interruption, landlord insurance and non-professional event cancellations remained limited”.
Across the broader group, Ageas is “confident” it can weather the coronavirus storm.
It said: “Low mobility during the period of lockdown significantly reduced the claims frequency in motor and thanks to Ageas’s product portfolio, which is mainly geared towards individual customers, the group has limited exposure to claims related to lower commercial activity.
“The group’s capital, solvency and liquidity positions have remained strong and essentially unaffected by the pandemic.
“Ageas remains prudent in making any predictions on the net result for 2020. However, the profit of the first nine months of the year clearly indicates that Ageas’s operations are very resilient.
“Therefore, without further major negative impact from the financial markets on the group’s investment income in the coming months, the group feels confident it will be able to deliver a result close to the initial group results guidance of €850m to €950m, excluding the impact from RPN(I) and the positive one off impact from the FRESH operation.”
In quarter three, Ageas’s group net result is €203m, compared to €994m for the first nine months of the year. The net result for its non-life business grew to €311m, while non-life inflows increased by 1% to €5.1bn. Inflows group-wide improved by 4% to €7.8bn, however the nine monthly total was down 2% at €27.9bn.
Ageas chief executive Hans De Cuyper said: “I am very pleased that even in these persistently challenging times caused by the pandemic, our activities continue to show strong resilience.
“The third quarter saw inflows increase in most segments and an improved underlying operational performance in both life and non-life.
“Specific impairments on equity in Asia and lower recurring investment income from dividends and real estate revenues resulted in slightly lower insurance net profits.
”Year-to-date profits as well as our solvency and cash position remain strong.
”Consequently, and assuming no material impact from the financial markets in the last weeks of the year, we remain confident that we will be able to achieve a result close to our initial guidance.
“I want to thank all our employees and partners for their commitment in helping all our customers and engagement towards society through these exceptional times.”