Ageas Earnings: Looking Good on Internal Full-Year Targets and Our Forecasts

Ageas reported pretty decent results for the first half of 2024, delivering ahead of Impact24 targets. The domestic business has performed steadily, delivering a 5% rise in net inflows, with strength coming from nonlife and a combined ratio of 91.7%, considerably better than the 95% group operating target. Domestic guaranteed life and unit-linked margins were also considerably better than Impact24 targets. In the Europe business, inflows rose by double digits, with life inflows the strongest in Portugal and Turkey, and nonlife benefiting from a rate increase. The net operating result for Asia has dropped off as business in China works through a regulation cycle. Here, some limitations are being placed around participating bonusses, lowering customer expectations and demand. From Sept. 1, rate reductions are being put through for nonparticipating products from 3.0% to 2.5%; participating products are coming down from 2.5% to 2.0% on Oct. 1; universal life from 2.0% to 1.5% on Oct. 1. Further, the regulator is requesting the China Insurance Association come up with a dynamic price adjustment mechanism linked to 10-year bond yields and the five-year loan prime rate; and it also requested companies look at their product mix and introduce a greater proportion of participating and universal life. The business is busy training agents to deal with this transition. The short-term impact is likely to be lower sales.