BELGIAN insurance giant Ageas posted a bigger-than-expected quarterly loss yesterday as a positive performance in the UK failed to offset large declines in its holdings of government bonds.
Ageas, reborn from the insurance arm of the European banking group Fortis after the firm was part-nationalised, made a group loss of €154m (£135m), worse than the €128m expected by analysts.
Its €143m net insurance profit for the quarter was swamped by a €288m net loss on the group’s quarterly account, as it wrote down €1.3bn in unrealised losses from its €33.1bn sovereign bond portfolio.
The group’s growth driver was Ageas UK, primarily a non-life home and motor insurance, where income rose 75 per cent to a record £411m in the quarter as a lucrative partnership with Tesco saw it take over the policies of about 575,000 insurance customers since October.
Ageas UK returned to profit in the first-quarter as pre-tax profit rose to £3.8m from a loss of £3.2m in the same period in 2010, although its 106 per cent combined ratio, a measurement of premiums collected versus claims paid out, remained overall loss-making after it paid £12.8m in bad weather claims.
Chief executive Barry Smith said the company expected 2011 to be “a big year” as it continued transferring Tesco’s 1.5m policies to its stable while absorbing recent purchses.
“Our priority is to deliver what we have got here as our company profile has changed quite a lot,” he said.
But he warned that regulatory changes both at European and UK levels would continue to bear on insurers in 2011. “The gender ruling that came out was a warning signal across the bows,” he said.