Financial Highlights: - Non-Life Profit Before Tax and Interest increased to GBP 76 million (2007: GBP 30 million).
- Growth in non-life Gross Written Premium (GWP) to GBP 760 million (2007: GBP 758 million); pricing discipline and volume maintained.
- Strong capital position for Fortis Insurance Ltd of GBP 346 million.
- Good start to Life business with New Annual Premium reported at GBP 2.77m and over 11,600 customers gained since launch in July 2008.
- Total Broker Income for retail businesses up 1.2 per cent to GBP 95 million.
- Non-life combined operating ratio after investment income improved to 92.2 per cent (2007: 98.1 per cent).
- Strong investment portfolio result, outperforming the market whilst maintaining a prudent approach: investment values increased by GBP 43 million over 2007 levels.
Operational Highlights:
- Successful launch of Life business with expansion into new offices in May.
- Significant new partnerships secured, laying the foundations for growth in 2009-10.
- Continued commercial and personal lines product development supporting Fortis' growth strategy.
- Significant new five year commercial SME deal announced today in partnership with Heath Lambert and Post Office Financial Services.
- Strengthened senior management team.
- Approximately 150 new jobs to be created in 2009 to support business growth.
- Recognition for service excellence: the first general insurer to be awarded the Gold Standard.
Announcing the 2008 year end results, Barry Smith, Chief Executive, Fortis UK commented:
"I am pleased to report continued growth in both profit and premium income in 2008, despite the ongoing challenging market conditions. We continue to receive an overwhelming positive response from the market, evidence of the strong relationships we have with our brokers and partners and the overall appeal of our insurance propositions.
Our focus has remained on the delivery of sustained operational efficiency, especially with claims management, and the delivery of high levels of service to our brokers, partners and customers. We have achieved an enormous amount in a short space of time, doubling our profit and premium income over recent years, and I'd like to thank our clients and people for contributing to the development of this dynamic and growing business."
Reflecting on Fortis' results and looking into 2009, Smith added:
"We continue to make major steps forward in the delivery of our strategy through the launch of new products and channels, particularly in the commercial and protection markets. Following a number of new deals announced already this year, I am also delighted to announce today a new partnership with Heath Lambert and Post Office Financial Services to launch a suite of products into the SME commercial market.
All of this is underpinned by the skills, expertise and focus of our people including the most recent appointments to our senior management team.
Our results demonstrate the success of our multi-channel strategy, which combined with our continued innovation and service excellence will provide a strong platform for growth in 2009 through 2010. This growth will lead to the creation of approximately 150 new jobs in our business in 2009. We remain resolute in our approach to deliver high quality and sustained profitable earnings through our underwriting discipline."
2008 Performance:
Fortis (Insurance, UK) today reported a strong 2008 performance, with non-life Profit Before Tax and Interest (PBT&I) increasing to GBP 76 million, driven by Fortis' non-life underwriting and retailing activities. This improved result compares with GBP 30 million PBT&I in 2007, which was impacted by adverse weather conditions. Fortis' capital position has also improved as a result of both the profit performance and a strong investment portfolio, with capital resources for Fortis Insurance Limited of GBP 346 million in excess of 2.82 times the minimum capital required by the FSA. Fortis has a low risk, high quality investment portfolio which has significantly outperformed the market in 2008 with an overall increase in value compared to 2007 of over GBP 43 million.
Non-life GWP saw a steady increase to GBP 760 million (2007: GBP 758 million). The increase reflects our pricing discipline and targeted growth in profitable markets. Private car was marginally impacted by the market conditions; however volumes were maintained with in excess of 1.6 million cars insured. 2008 loss ratios on our motor book improved by almost 2 per cent over 2007 levels, reflecting our disciplined underwriting approach. The reported non-life combined operating ratio after investment income improved to 92.2 per cent from 98.1 per cent in 2007.
As part of Fortis' strategy to broaden its proposition, the introduction of the new Life business to the market in the third quarter brings new product and underwriting innovation, which has been well received by customers and clients. At the end of 2008 Fortis Life UK reported New Annual Premium of GBP 2.77 million, insuring over 11,600 customers, and remains on track to deliver profits in line with its original business plan. To support the expansion of the business, Fortis announces today that a new, additional office will be opened in Reigate next month, demonstrating Fortis' commitment to growth in this market.
In the highly competitive retail environment, Fortis has sustained growth in Total Broker Income delivered across its main retail businesses, RIAS and Fortis Insurance Solutions (formerly The OutRight Company). Revenues increased by 1.2 per cent to GBP 95 million (2007: GBP 94 million), with particular strong impetus from Fortis Insurance Solutions as a result of its support for the partnerships proposition and increased volume through its dominant online channel.
Growth in 2009:
Fortis' profitable growth strategy for 2009 is based on providing market leading customer service; an efficient, low cost business model; strong partnerships; innovative product development that meets customer needs; and employing and retaining the very best people in the industry.
As well as the planned expansion of the Fortis Life UK operation, the new deals we secured in 2008 have put Fortis in a strong position for continued profitable growth. In particular, the company secured a significant new partnership with Greenbee (part of the John Lewis Partnership) in the delivery of its motor insurance proposition, and also renewed its contract with Post Office Limited for another five years on its travel account. In the first quarter of 2009 Fortis has already announced a major new partnership with UKU (part of Primary Group), the launch of a new van proposition with Budget Group, as well as deals with Insure and Go, Towergate Marine and Kerry London.
In addition, Fortis announces today a significant new five year deal in partnership with Heath Lambert and Post Office Financial Services as part of its entry into the commercial SME market. Fortis, together with Heath Lambert, will support Post Office Financial Services in launching SME products, including Shop, Office, Homeworker, Property Owners, and Tradesman, which will initially be sold via the crown and agency network, targeting a daily footfall of 24 million customers. An online proposition will also be developed to extend the distribution beyond the agency network.
In addition, Fortis continues to strengthen its relationships with its 2,300 strong brokers, differentiating its service proposition with new attributes, including the launch of the award-winning CheaperCover.com in the first quarter of 2008. Fortis has also been selected by brokers to participate on their panels for some significant brands, including the Budget Group panel for Barclays.
Strengthening the senior management team:
In 2008, Fortis continued to appoint the best talent in the industry to support its profitable growth strategy. Mark Cliff joined Fortis Insurance Limited as Managing Director in October 2008, leading the development of the general insurance underwriting and claims business. Significant appointments announced so far in 2009 include Julian Hance as Non-Executive Director of Fortis Insurance Limited, Mike Urmston as Non-Executive Director of Fortis Life UK, and Anthony Lewis as the new Director of Commercial and Pricing at Fortis Insurance Solutions. All of these individuals bring industry expertise and an independent perspective to the Fortis strategy.
Award-winning service and propositions:
Fortis is consistently recognised for its customer service ethos and innovation. Throughout 2008, the company received a number of prestigious accolades1 from clients, suppliers and the industry, including being announced as the first insurer to be awarded the Gold Standard for Insurance, recognising amongst other attributes, its financial strength and customer service ethos. Service excellence will remain a key differentiator for Fortis UK.
Notes to editors
1 Fortis accolades, 2008
- Insurance Times Awards - Motor Insurer of the Year (December, 2008)
- Incisive Media - Gold Standard for Insurance (November, 2008)
- ifs Financial Innovations Awards - Most Promising New Product - Insurance (November, 2008)
- Auto Body Professionals Club - Insurer of the Year (October, 2008)
- British Travel Awards - Best Travel Insurance Company - Post Office (October, 2008)
- Green Business Awards - Best Financial Business - The Green Insurance Co. (October, 2008)
- British Insurance Awards - Claims Initiative of the Year (July, 2008)
About Fortis
Fortis (Insurance UK) is a leading provider of award-winning personal and commercial lines insurance solutions in the UK. Fortis UK has two main divisions, manufacturing both non-life and life products, which are distributed through a range of channels including brokers, IFAs, intermediaries, affinity partners and the Internet, as well as various wholly or partially-owned companies (RIAS, Fortis Insurance Solutions, Affinity Solutions Ltd, Text2Insure and InsureTECH Systems).
Insuring in excess of 6.7 million customers and working with a range of partners, Fortis is recognised for delivering consistent and high-quality customer experiences. It employs almost 3,000 people with a head office based in Eastleigh and others in Belfast, Bournemouth, Gloucester, Haywards Heath, London, Redditch, and Stoke-on-Trent. In 2008, its non-life profit before tax and interest was £76 million and its non-life GWP was £760 million.
Press Contacts:
Paul Lynes
Fortis UK, T: 023 8031 3152, M: 07786 061537, E:
Natalie Shale
Fortis UK, T: 023 8035 2754, M: 07786 034757, E:
Peter Russell
Finsbury, T: 020 7251 3801, E:
Clare Dundas
Finsbury, T: 020 7251 3801, E: