Ageas UK sees transformation strategy reap rewards in 2023

A lot of work has been done in the intervening period, and in 2023 we began to really see the benefits of this decision. Our satisfaction scores continue to rise and remain top quartile. We are winning and retaining more customers with our customer base up by around 25% to 4 million customers across Motor and Home. And with an eye on reaching a target of less than 95% combined ratio by the end of next year, we are well on track to achieve that.

Our 2023 story is also one of continued investment in critical elements of the business including investments in data, technical insurance capabilities, technology, and having a competitive cost base.

Data is an extraordinary asset, as so much of everything we do, depends on it. So much so, that we have set up a single cloud-based data platform and deployed software tools in the cloud for our data scientists to develop and train machine learning models. This year we have established a Data Centre of Excellence which helps us to accelerate our data science and advanced analytics capability development in support of the business and across the full value chain. And close to 1000 people are now part of a dedicated data literacy development programme.

One of the benefits we have seen is the result of a proprietary model we developed to track inflation trends in a more accurate way than ever before, against different elements of our portfolio. This allows us to be at the forefront of tracking critical issues like inflation, enabling us to prepare and respond more quickly to the real challenges affecting us and our customers. For example, in Motor, a market that is extremely price sensitive, we were able to make early repricing decisions which stood us in good stead to grow this year, but also well placed to support our brokers and customers at what has been a tough time. Increased pricing was an inevitable consequence of inflation and its impact on costs hat said, our customer retention rates have improved, and we remain cognisant of the impact this will have on customers. We have refreshed our Ageas Care training for our people to be ready and able to support vulnerable customers and have reapplied and updated some of the measures adopted during Covid, including offering a range of financial flexible packages designed to help customers manage the payment of their insurance.

In technology we are completely transforming our core operating platform, consolidating two platforms into one cloud-based system which will go live in 2024. It will provide us with more agility and the ability to deliver new customer propositions we have not previously been able to deliver, while reducing costs and increasing our speed to market.

At the same time, we are continuing to improve our front-end digital offering by incorporating more self-service capabilities that allow customers to interact on any aspect of their policy, at their convenience. Some 90% of our direct new business is transacted entirely digitally and 70% of all servicing queries are also handled this way, based on customer demand and making services available for them to interact with their insurance in ways they choose. 

Technology is advancing at breakneck speed, especially new technologies like AI and GenAI which hold a lot of potential for our business. We are proceeding carefully in this space, accepting that there are also risks to consider, and are developing among other things use cases in HR, Claims and Customer Experience to test the opportunities. 

A major achievement in 2023 was the deployment of real-time pricing software, which is a leap forward in our price management, underwriting selection, and competitive position. While advanced machine learning models helped improve our sophistication in pricing in recent years, we were not able to bring that expertise to the market in real time. Now we can - including intra-day pricing which is a massive benefit to brokers and our customers, and this alone has increased our quote conversion rate by around 15%. Having successfully deployed this software in Motor; it will be applied to our Home insurance in 2024. 

As we look forward, inflation, pricing and the impact of weather events will continue to present challenges. As one of the early pioneers of initiatives like Flood Re and Build Back Better where we are supporting customer with more resilient repairs after they have been affected by a flood, we also remain committed to looking for ways to counter the impact of climate change to ultimately reduce the cost and that gets passed on to customers. We created a Weather Taskforce in 2023 made up of experts from within the business, brokers, and external specialists to help us better anticipate and manage the impact of weather events. This allows us to take preventative measures and to increase our communication with customers. Thanks to a more precise identification of the epicentre and timing of weather events, we can work more closely with customers to help them prepare for these events and feedback already shows customer appreciate for this. 

We are proud that Ageas UK continues to receive many high-profile awards for customer service. The UK is continuing to make good progress also as the Group’s Centre of Excellence for customer experience, inspiring the roll out of CX initiatives across different markets. Our people, our greatest asset of all, remain fully engaged. We continue to enjoy above benchmark employee NPS scores, and the company was accredited Top Employer status for the second year and named a 5-star employer by Insurance Post based on employee feedback. And finally, as our largest distribution channel brokers play such a critical role in reaching our customers, we are delighted with the continued positive sentiment toward us, underpinned by their nominations for Ageas as Personal Lines Insurer of the Year, but also to welcome in 2023 new broker deals including with Ardonagh, Yoga and Sainsburys. 

In sustainability we are making strong progress in many areas extending to our commitment to diversity. We have already achieved our target of 40% of the leadership group being made up of women. And in other sustainable initiatives we are a carbon neutral business; we continue to lead the way in green parts car repair; and we invest around a quarter of a billion pounds in sustainable assets. 

In 2024 we will complete the final year of our transformation strategy which aligns with the final year of Impact24, so with all targets to be delivered we will roll out our new core platform; extend our real-time pricing software to Home and deliver on our technology objectives including seeing the first benefits of some of the AI models we have put in place this year.