UK Insurance Company Ageas Sees Profits Hit by June Floods

Ageas has reported a UK net profit of GBP 27.1 million, down on the same period last year (6M 2015: GBP 29.5 million).

The company says the year on year decrease was the result of flash floods and storms in June across parts of the UK and weather related claims in the first quarter, compared with benign weather in the first half of 2015.

Flash, and surface flooding was reported in parts of the North West, Midlands, London and the South East during June this year.

River flooding was also reported in parts of London, where the Environment Agency said that a number of rivers reached their highest recorded river levels between 22 and 23 June, including the River Rom, River Wandle, Beverley Brook at Wimbledon, the River Shuttle at Bexley, River Ravensbourne at Bromley and the River Ingrebourne near Rainham, Essex.

Ageas UK offer personal and commercial insurance to over 8 million customers. The company is one of the largest motor insurers in the UK and is part of the Ageas international insurance group, which is ranked among the top 20 insurance companies in Europe, and has key markets in Europe and Asia.

Andy Watson, Chief Executive of Ageas UK said:

“Despite the impact of the flash floods and storms in June, and the weather related claims in the first quarter, we’ve continued to deliver a strong and profitable performance predominantly as a result of further increasing the number of Motor customers we insure year on year. We’re also pleased to see the benefit of new schemes in the broker channel in both Household and Commercial lines.”

In a statement, Ageas reported that the half year financial result also includes Ageas’s 50.1% share of the net result of Tesco Underwriting, the Motor and Home insurance partnership with Tesco Bank, which increased to GBP 3.4 million (6M 2015: GBP 3.2 million).

Ageas’s consolidated UK combined ratio rose to 100.1% (6M 2015: 98.6%), which includes a 2.0% impact from the June flash floods and storms. Motor continued to improve year on year to 97.9% (6M 2015: 103.2%), driven by price increases and a lower expense ratio. The Household combined ratio was 101.7% (6M 2015: 87.0%) reflecting the weather-related claims. The combined ratio of Commercial lines and Special Risks was 107.7% versus 97.9% at 6M 2015 (the Commercial lines ratio including Commercial Motor at 6M 2016 was 96.0%). This reflects significant prior year releases in 2015, compared to 2016, and the performance of an MGA scheme that was put into run-off in the second quarter of 2016.