Chartis, Ace, Bupa, Zurich and Allianz are making headway in the next tier of our Top 50
The UK business of AIG has seen a merciful lack of drama in the year since it was put into the untainted European Chartis brand. Chartis’s European chief executive Lex Baugh is seen by brokers as having steadied the ship: while its troubled parent company made a loss of $799m (£499m) in the first half of this year, Chartis’s profit more than doubled to $2.4bn, up from $1.1bn in the same period last year.
In April, Baugh quashed rumours that AIG would float Chartis UK Insurance and use the proceeds to repay the multibillion-dollar bailout it received from the US government in 2008.
Up from eighth place in last year’s list, with a gross written premium of £2.3bn in 2009, big corporate risk specialist ACE is weathering tough conditions well. The global group’s half-year results in July showed that, despite more than doubling its catastrophe losses, ACE’s combined ratio increased only two percentage points, to 89.7%, compared with the same period last year. Half-year net income was $1.43bn (£888.2m), compared with $1.10bn. The European business, under chairman and chief executive of ACE European Group Andrew Kendrick, made up 20% of the group’s $19bn gross written premium in 2009, and brokers like the company. One says: “Anyone who courts brokers the way ACE does will win votes.”
Bupa Health Assurance has just been bought by Resolution for £103m, but will be run as a standalone entity within Friends Provident’s life operating business for up to a year. Resolution expects £22m of savings through synergies.
Bupa and its main rival AXA PPP control around 80% of the UK private medical insurance market between them, but this stranglehold could be about to be loosened by the Office of Fair Trading (OFT). The two companies’ near duopoly riles brokers (although they concede that both firms offer good service) and in October prompted a new private hospital firm, Circle, to demand action from the OFT.
Bupa’s first-half revenues for 2010 were up 10% to £3.71bn, although its surplus before tax was down 1%, to £162.1m.
Fined £2.3m by the FSA in August for losing the personal details of 46,000 customers, and then exposed in Insurance Times the same month for another data leak, Zurich has had a rocky year. It is also taking a hit after increasing its rates – most recently it upped personal lines motor by 15% – to combat rising bodily injury claims. This contributed to a 20% fall in global general insurance operating profit to $1.37bn (£850m), and a 2% drop in gross written premium to $17.94bn, down from $18.28bn, for H1 2010. The UK general insurance division’s combined ratio for the first half rose to 99.7% from 95.2%.
Allianz has edged back into the top 10 after coming 11th last year. UK chief Andrew Torrance said a year ago that gross written premium for the retail business, which in the first half of 2009 was down 20% on the same period a year earlier at £292.1m, would fall further as the firm continued to drive up rates. Nevertheless, in August this year, Allianz announced an impressive combined operating ratio for H1 of 95.2%. Chris Hanks, Allianz’s commercial lines director, has denied speculation that the firm’s strength is partly down to aggressively chasing the customers that Aviva was losing under former chief executive Igal Mayer.