Fortis UK profit down £47m

Fortis reports non-life profit before tax and interest of £29m, down from £76m in 2008, with CEO Barry Smith attributing reduced profit to “challenging market conditions.”

Rising claims inflation in the motor market and third party damage costs were attributed to the reduction in profit on 2008.

Combined operating ratio after investmenr income was reported at 98.9%, up from 92.9% in 2008.

The insurer posted a record level of non-life gross written premiums in 2009, increasing 6% to £805m, up from £760m in 2008.

Fortis also reported a “strong capital position” of £332m, in excess of 2.6 the minimum capital required by the Financial Services Authority.

The group highlighted a 35% growth in commercial business to £102m in 2009, alongside the creation of 600 jobs.

Fortis’ household and private motor portfolio increased to £208m and £414m respectively.

Total broker income increased 5% to £100m.

The insurer also indicated that its deal with Tesco Bank, revealed by Post, was “on track” to launch in the last quarter of 2010, and could rebrand to ‘ageas’ at the beginning of 2011.

Barry Smith, chief executive of Fortis UK, said: “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”, he added.