Fortis profits plunge with name change on the horizon

Fortis UK has reported a huge £47m drop in profit before tax to £29m as it announced it is to rebrand as 'ageas'

Fortis UK has reported a huge £47m drop in profit before tax to £29m as it announced it is to rebrand as 'ageas'.

The drop in profitability comes despite an increase in gross written premiums (GWP) to £805m (2008: £760m). The combined operating ratio slipped nearly 7% to 98.9% even after investment income had been factored in.

However, the company reported 35% growth in commercial lines to £102m in GWP and a 5% increase in broker income across the retail book to £100m.

Barry Smith, chief executive, Fortis UK commented: "Despite the challenging market conditions affecting the industry throughout 2009, we have delivered record levels of premium income and are encouraged by the progress we are making in the broker market. We have completed significant deals including the largest insurance partnership in the UK with Tesco Bank, which will accelerate our development in 2010 and beyond. We are now actively recruiting for approximately 600 new jobs to support our continued business growth.

“Furthermore, today we mark a new chapter in our history with the announcement of Fortis' proposed new name, "ageas". If Fortis shareholders approve the new name at the end of April, we will be looking to introduce it into the UK by Q1 2011."

On its household portfolio Fortis saw a 22.7% increase to £208m (2008: £170m). Private car experienced a decline in GWP of £45m to £414m. Fortis attributed this slide to its “continued focus on achieving profitability in the current difficult market conditions”.

The travel book GWP remained flat at £49m, only a slight dip from last year’s £50m – this was attributed to a decline in the number of people travelling due to the recession.