PRESS RELEASE 9M 2015 results Ageas UK, 4 November 2015

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1 PRESS RELEASE 9M 2015 results Ageas UK, 4 November 2015 Ageas UK announces nine month profitable performance Executive Summary Solid year on year profit Net profit of GBP 46.9 million compared to an underlying profit of GBP 44.5 million (9M 2014). Including a one off benefit, profit at 9M 2014 was reported at GBP 63.2 million. Overall combined ratio improved to 98.3% (9M 2014: 99.3%). Total income reflects continued low market average premiums Total income: GBP 1,483.0 million (9M 2014: GBP 1,544.2 million). Total Non-Life Gross Written Premiums (GWP): GBP 1,367.1 million (9M 2014: GBP 1,417.6 million). Total inflows from Retail business: GBP million (9M 2014: GBP million). Well capitalised business Strong capital positions held in Ageas Insurance and Tesco Underwriting. Ageas Insurance rated Standard and Poor s A- with a positive outlook and Fitch A+ Strong. Announcing the nine month 2015 results, Andy Watson, Chief Executive of Ageas UK said: I m pleased to report that we ve delivered another solid quarter s performance in a challenging market. When you look at our underlying result, we ve remained stable year on year. In terms of Motor performance, we took deliberate pricing action in the first half of the year that s starting to pay off. This is supported by the much needed upward trend in Motor prices in response to more traffic on our roads and the increase in costs of third party damage claims as a result of more aggressive approaches to non fault claims in the market. The home market remains very competitive with soft rates linked to the continued benign weather conditions. Brokers and partners continue to choose Ageas as their preferred partner of choice, evidenced by the recently secured 10 year deal with Age UK, as well as the launch of a new home and motor proposition PRESS RELEASE 073/15 1

2 with Virgin Money. Our focus on new Personal and Commercial schemes continues to bring success, coupled with our longstanding reputation for excellent customer service. Business Results As a result of the sale of Ageas s life protection business at the end of 2014, all historic data has been restated accordingly to allow a like for like comparison. During the first nine months of 2014 Ageas Protect reported inflows of GBP 80.9 million and a post tax profit of GBP 1.6 million. Ageas UK Ageas UK is focussed on delivering profitable returns through a clear and consistent multi-distribution strategy and partnership approach with brokers, affinities, intermediaries and through its own Retail business. The combination of high quality service and low cost delivery remains a strategic priority for the Ageas UK businesses. In the first nine months of 2015 Ageas UK reported a net profit of GBP 46.9 million (9M 2014: GBP 63.2 million). The 2014 result included a previously reported one off benefit from a legal settlement and the underlying result for the same period was GBP 44.5 million. The stability of this result reflects continued benign weather during 2015, as well as an improved performance in the Commercial lines business. Total income, including Tesco Underwriting, was GBP 1,483.1 million (9M 2014: GBP 1,544.1 million), reflecting the impact of Ageas s continued disciplined approach to pricing against a market where Motor premiums are just starting to increase and where Household average market premiums continue to be low. Ageas has around 8 million customers across its businesses in the UK and insures 3.7 million Motor policies. Ageas s strategic partnership with Virgin Money launched in October with a new Motor and Home offer for Virgin Money s 3 million customers. In addition, the long-term partnership with Age UK was further extended by 10 years, aiming to grow its 1.3 million customer base. Non-Life: Ageas Insurance Ageas Insurance s net result increased to GBP 46.2 million (9M 2014: GBP 43.9 million) reflecting a better performance on Household. The result also reflects continued good performance in Commercial lines business with brokers as a result of increased focus and clarity of propositions in this area. PRESS RELEASE 073/15 2

3 In the first nine months of 2015 Ageas Insurance delivered Gross Written Premiums (GWP) of GBP 1,059.7 million (9M 2014: GBP 1,081.9 million) reflecting pricing action taken earlier this year in Personal lines against a competitive Motor and Household market. In Personal lines, Motor (Private Car and Commercial Vehicle) income was GBP million (9M 2014: GBP million), while Household income was down at GBP million (9M 2014: GBP million). Commercial and Special Risks inflows saw an increase of 5.7% to GBP million (9M 2014: GBP million) as a result of the good performance of Special Risks and stronger new business growth in the last quarter on both Fleet and traded SME accounts. The schemes proposition remains strong as a result of Ageas s growing reputation for excellence and focus remains on long term sustainable growth. The combined ratio for Ageas Insurance continued to deliver a sub 100% performance and by the end of the first nine months improved to 98.3% (vs. 99.3% 9M 2014). The Motor ratio remained in line with the first six months but deteriorated year on year to 100.8% (9M 2014: 99.4%) reflecting a higher frequency of accident claims linked to increased traffic volumes 1 combined with continued higher third party damage average costs. The benign weather so far this year has contributed to a good Household ratio performance at 92.1% (9M 2014: 95.1%). The total Commercial and Special Risks ratio improved to 97.7% (9M 2014: 105.6%). As an industry like for like comparison, Ageas s Commercial lines ratio, including Commercial Motor, significantly improved to 84.0% (9M 2014: 96.9%). Tesco Underwriting Tesco Underwriting, the Motor and Home insurance partnership with Tesco Bank, of which 50.1 per cent is owned by Ageas, generated GWP of GBP million during the period (9M 2014: GBP million). Lower new business and average premiums were seen across both Motor and Household as a result of the continued competitive market conditions. Ageas s interest in Tesco Underwriting resulted in a net profit of GBP 5.0 million (9M 2014: loss of GBP 1.4 million). Tesco Underwriting recently announced the appointment of Steve Kingshott as CEO who joins the business in December 2015 to replace Geoff Carter. 1 All motor traffic increased by 2.3% in the year ending June 2015 compared to the prior year. Department for Transport, Quarterly Road Traffic Estimates, Great Britain, April - June 2015, Published August PRESS RELEASE 073/15 3

4 Other activities: Within Ageas UK s Other activities, the Retail business delivered a net profit of GBP 6.4 million (9M 2014: GBP 10.6 million). Total Other business reported a net loss of GBP 4.3 million (9M 2014: profit of GBP 20.8 million) reflecting the benefit from the receipt of a legal settlement in last year s result, as well as strategic costs and stable regional headquarter costs. Total inflows were GBP million (9M 2014: GBP million) against the backdrop of a market where competitive Motor and Household market conditions are putting volumes in large Personal lines intermediaries under pressure. As part of Ageas s Retail strategy to respond to the challenges of a competitive market, actions continue to be taken to simplify the business model. One of the key deliverables has been a move from six customer systems to one, as well as a move to one telephony platform, which has progressed well. Ageas UK Results Summary: Income Total Non-Life (inc. non-consolidated partnerships at 100%) Other Insurance including Retail Life Protection Net Profit Total (excluding Life) Non-Life Other Insurance including Retail Life Protection Key Ratios (Ageas Insurance) Total Combined ratio Non-Life Motor Non-Life Household Non-Life Accident & Health Non-Life Commercial & Special Risks** To end of September 2015 in millions 1, , (4.3) % 100.8% 92.1% 100.4% 97.7% To end of September 2014 in millions 1, , * % 99.4% 95.1% 103.5% 105.6% * GBP 44.5m underlying profit in 2014 excluding a one off benefit. **Commercial and Special Risks includes costs of integration. Commercial lines including Commercial Motor reported a total combined ratio of 84.0% (vs. 96.9% in 2014). - ENDS - PRESS RELEASE 073/15 4

5 NOTES TO EDITORS Ageas UK is a leading provider of award-winning insurance solutions in the United Kingdom. It distributes Personal and Commercial products underwritten by Ageas Insurance Limited through brokers, intermediaries, affinity partners, the internet and through its own wholly or part-owned companies trading as Ageas Retail, which also distributes products of other providers. Ageas Retail s brands include Castle Cover, Kwik Fit Insurance Services and RIAS. Ageas UK also holds a 50.1% share in Tesco Underwriting, providing home and motor insurance to Tesco Bank customers. Insuring around eight million customers and working with a range of partners, Ageas UK is recognised for delivering consistent and high-quality customer experiences. It employs around 5,500 people with offices based across the UK. Ageas is an international insurance group with a heritage spanning 190 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, the UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India, Thailand and the Philippines and has subsidiaries in France, Portugal, Hong Kong and the UK. Ageas is the market leader in Belgium for individual life and employee benefits, as well as a leading Non-Life player through AG Insurance. In the UK, Ageas occupies the number 3 position in cars insured and has a strong presence in the over 50s market. Ageas employs more than 13,000 people in the consolidated entities and over 30,000 in the non-consolidated partnerships, and has reported annual inflows close to EUR 26 billion in PRESS CONTACT Ageas UK: Natalie Shale, Head of Communications Tel: press.uk@ageas.co.uk PRESS RELEASE 073/15 5