Personal Lines - Product Value Statements

The Ageas Private Car (APC) product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. APC is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the Private Car insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

APC is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the higher end of the expected range, which was anticipated as migration over to the product continued. There are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations were within normal range, whilst dropping slightly from 10.72% to 10.48%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 83.7%, claims frequency at 5.83%, claims repudiation 0.1%, and claims acceptance at 99.47% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 19.89% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 18.48%, however 87% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.

The average premium that customers pay is £239.59, with an average claim pay out of £2,444.37. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 10 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-17.5% with an average of 9.10%. The combined operating ratio for the scheme/product for 2021 was 101.90% which is greater than the expected of 90.35%, and broadly in line with strategic targets. The drivers include the increased supply chain costs, operating costs, and inflation.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Van Guard (CV) product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Van Guard is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the Commercial Van insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Van Guard is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the lower end of the expected range, which was anticipated due to Covid impacts to the supply chain. This meant that there were delays in new vehicles causing a backlog in new car purchases; however based on the full review, there are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations were within normal range, whilst dropping slightly from 13.70 % to 13.33%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 54.60%, claims frequency at 7.57%, claims repudiation 0.47%, and claims acceptance at 99.26% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 15.92% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 14.84%, however 62% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.
The average premium that customers pay is £261.00, with an average claim pay out of £1924.78. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 7 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-12.5% with an average of 8.49%. The combined operating ratio for the scheme/product for 2021 was 94.90% which is greater than the expected of 92.10%, and broadly in line with strategic targets. The drivers include the increased supply chain costs, operating costs, and inflation.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

Summary

Our opinion is that MotorGuard offers good value for those customers within the target market and provides them with good outcomes. They will receive a product that will meet the requirements and needs of those looking for a generic ‘mass market’ motor insurance policy. – We have used an array of live product information on performance, price, distribution, and service to come to this opinion.

This product has a wide range of customers in its target market. Please refer to MotorGuard’s target market statement for information on who this product is and is not suitable for.

Cover

In keeping with the needs of this target market, MotorGuard is a standard risk car insurance policy, offering comprehensive cover for the standard perils of accidental damage, malicious damage, fire, and theft. Some other items such as windscreen damage, replacement locks and driving abroad are also included. Cover is explicit in the policy documentation and transparent to the customer. This allows them to understand how MotorGuard meets their needs and means they can compare with other products as necessary.

Excesses

Voluntary excess amount can be selected by the policyholder in line with their financial requirements and are used to balance up-front premium costs. Compulsory excesses are set in line with our claims experience, represent an appropriate compromise between cost and value, and are not out of step with similar products offered by Ageas, or others in the market. Excesses are clearly set out in the policy documentation.

Pricing

The average premium is appropriate given the level of cover and service offered. Metrics used in the product review (such as average claim payment) show significant benefit is taken by a customer that needs to claim under an MotorGuard policy. It is also in line with competitors offering similar products.

Distribution

MotorGuard is sold through intermediaries on all the major insurance software platforms, a suitable distribution model for an open-market product with a wide target market. The flexibility to sell face-to-face, over the phone, or through websites/aggregators allows for the distribution to match the specific requirements of a broker or customer, and help the product reach a wide variety of customers looking for standard, comprehensive car insurance The product is not directly marketed as it is sold exclusively through intermediaries. Most of the business written comes via aggregators where there is clear comparison available for the customers to review.

Remuneration

Given the distribution model of MotorGuard, there is a level of remuneration (through commission and fees) taken by the intermediary on every policy. These are clear to the customer, and given they are responsible for any marketing and servicing of the customer and policy, these are in our opinion appropriate and justifiable. 

Summary

Our opinion is that this product offers good value for those customers within the target market and provides them with good outcomes. They will receive a product that will meet the requirements and needs of those looking for a generic ‘mass market’ motor insurance policy. – We have used an array of live product information on performance, price, distribution, and service to come to this opinion.

This product has a wide range of customers in its target market. Please refer to OC’s target market statement for information on who this product is and is not suitable for.

Cover

In keeping with the needs of this target market, OC is a standard risk car insurance policy, offering comprehensive cover for the standard perils of accidental damage, malicious damage, fire, and theft. Some other items such as windscreen damage, replacement locks and driving abroad are also included. Cover is explicit in the policy documentation and transparent to the customer. This allows them to understand how OC meets their needs and means they can compare with other products as necessary.

Excesses

Voluntary excess amount can be selected by the policyholder in line with their financial requirements and are used to balance up-front premium costs. Compulsory excesses are set in line with our claims experience, represent an appropriate compromise between cost and value, and are not out of step with similar products offered by Ageas, or others in the market. Excesses are clearly set out in the policy documentation.

Pricing

The average premium is appropriate given the level of cover and service offered. Metrics used in the product review (such as average claim payment) show significant benefit is taken by a customer that needs to claim under an OC policy. It is also in line with competitors offering similar products.

Distribution

OC is sold through intermediaries on all the major insurance software platforms, a suitable distribution model for an open-market product with a wide target market. The flexibility to sell face-to-face, over the phone, or through websites/aggregators allows for the distribution to match the specific requirements of a broker or customer, and help the product reach a wide variety of customers looking for standard, comprehensive car insurance The product is not directly marketed as it is sold exclusively through intermediaries. Most of the business written comes via aggregators where there is clear comparison available for the customers to review.

Remuneration

Given the distribution model of OC, there is a level of remuneration (through commission and fees) taken by the intermediary on every policy. These are clear to the customer, and given they are responsible for any marketing and servicing of the customer and policy, these are in our opinion appropriate and justifiable. 

Optima Bike product is predominantly distributed online by a variety of brokers. The product is sold through aggregators, online and over the telephone. Optima Bike is a product where Ageas controls the policy wording and acts as the manufacturer of the motorcycle insurance. Ageas does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is riders aged between 19-75 years old, looking for comprehensive or TPFT cover for privately owned/leased motorcycle valued up to £40k (Comprehensive) & £5k (TPFT). Riders must have been a UK resident for at least 3 years and hold a valid UK licence. There is an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Bike is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed, and any appropriate actions are taken.

During 2021 the policy sales observed an increase which is positive and demonstrates a clear market for the product and that the market has been accurately targeted. Whilst this has increased, based on the full review, there are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations reduced from 11% to 9.79%, which is a good indication that customers are not facing barriers when looking to cancel. The increase observed is not to concerning levels and does not indicate diminished value.

The loss ratio at 74%, claims repudiation 10.71%, and claims acceptance at 89.29% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 60.71% of customers walkaway and do not carry on with a claim, this has decreased since the previous year of 69.59%, and whilst still high, 71% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and therefore raises no concerns.
The average premium that customers pay is £121, with an average claim pay out of £4568.39. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 37 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The average commission taken by the Broker is 17.5%. The combined operating ratio for the scheme/product for 2021 was 91% and broadly in line with strategic targets. The drivers include the increased supply chain costs, operating costs, and inflation.

The Optima Bike product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance, with a concern around the commission boundary. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. The fees for the product are low and do not present cause for concern. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

It is recommended that the commission boundaries are reduced to 0-50% in order to ensure remuneration stays within tolerance levels and as such, an action has been put in place.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Optima Bike 2 (Bike) product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Optima Bike 2 is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the Bike insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Bike 2 is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the lower end of the expected range, reducing from 8,262 in 2020 to 6,744 in 2021.There are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations saw a positive reduction, dropping from 28.7% to 18.61%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 79% claims frequency at 4.94%, claims repudiation 19.57%, and claims acceptance at 80.43% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 83.27% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 61.81%, however 53% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. An additional review was undertaken where it was identified the large majority of the remaining walkaways were theft – no damage claims, whereby the claim was then no longer required. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.

The average premium that customers pay is £291, with an average claim pay out of £2095.58. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 7 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-60% with an average of 9.50%. The combined operating ratio for the scheme/product for 2021 was 94% which is similar to the expected of 95%, and broadly in line with strategic targets.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Optima Motorhome product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Optima Motorhome is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Motorhome is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the higher end of the expected range, increasing from 11,008 in 2020 to 12,171 in 2021.There are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations saw a positive reduction, dropping from 10.81% to 7.71%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 70.4% claims frequency at 4.64%, claims repudiation 0%, and claims acceptance at 99.65% strongly evidences that the policy is serving customers well when they want to claim.

This is coupled with a low level of complaints, also a positive. During the claims process 7.43% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 6.67%, however 50% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.

The average premium that customers pay is £239, with an average claim pay out of £2854.86. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take almost 12 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-31% with an average of 23.40%. The combined operating ratio for the scheme/product for 2021 was 102.1% which is higher than the expected of 87%, and broadly in line with strategic targets.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Optima Plus product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Optima Plus is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is drivers who require a low annual mileage aged between 30 and 75, with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Plus is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the lower end of the expected range, increasing from 2488 in 2020 to 2409 in 2021.There are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations saw a positive reduction, dropping from 19.58% to 17.33%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 123.8% claims frequency at 5.18%, claims repudiation 0%, and claims acceptance at 100% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 26.80% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 6.67%, however 88% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.

The average premium that customers pay is £401, with an average claim pay out of £8054.67. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 20 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-20% with an average of 13.80%. The combined operating ratio for the scheme/product for 2021 was 134% which is higher than the expected of 104%, and is a clear representation of the customer receiving value.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The House Guard Simplification product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. House Guard Simplification is a core Ageas product were Ageas controls the policy wording. Ageas acts as the manufacturer of the household insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

House Guard Simplification is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales fell below expectations due to the restructure of product as it was split into two as per the simplification model, the cancellations remained consistent with a slight increase from 4% to 4.25%, there is not a concern that the product is not meeting the customer needs.

The loss ratio at 65.9%, claims frequency at 3.82%, claims repudiation 26.47%, and claims acceptance at 62.89% is evidence that the policy is serving customers well when they want to claim, and are all areas that are performing above the average for similar products. This is coupled with a low level of complaints, also a positive. During the claims process 14.19% of customers walkaway and do not carry on with a claim, this has increased slightly since the previous year of 14.91%, however, with household insurance often customers make contact to check the cover in place, but then proceed to not make a claim after discovering the value to repair or replace is inexpensive, thus not requiring insurance. This is not an indicator that the claims journey or process is not providing value, and raises no concerns regarding the value of the product at this stage.

The average premium that customers pay is £110.76 with an average claim pay out of £2,259.41. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 20 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas household products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The average commission charged is 23.9% with a boundary in place of now of 15-20% to avoid customers being charged excessive commission. The combined operating ratio for the scheme/product for 2021 was 93%.

The household product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – No Concerns.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Prestige product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Prestige is a core Ageas product were Ageas controls the policy wording. Ageas acts as the manufacturer of the household insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Prestige is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales fell slightly below expectations, the cancellations remained consistent with a slight decrease from 4.44% to 4.12%, the reduction in sales is expected due to the Simplification project and current software houses switching off the product. This trend is expected to continue as more software houses move to the simplified product and therefore there is not a concern that the product is not meeting their needs.

The loss ratio at 66.40%, claims frequency at 3.51%, claims repudiation 12.90%, and claims acceptance at 87.10% is evidence that the policy is serving customers well when they want to claim, and are all areas that are performing above the average for similar products. This is coupled with a low level of complaints, also a positive. During the claims process 16.13% of customers walkaway and do not carry on with a claim, this has increased slightly since the previous year of 15.38%, however, with household insurance often customers make contact to check the cover in place, but then proceed to not make a claim after discovering the value to repair or replace is inexpensive, thus not requiring insurance. This is not an indicator that the claims journey or process is not providing value, and raises no concerns regarding the value of the product at this stage.

The average premium that customers pay is £413.47, with an average claim pay out of £1992.82. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 4 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas household products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The average commission charged is 24.70% with a boundary in place of 20-30% to avoid customers being charged excessive commission. The combined operating ratio for the scheme/product for 2021 was 111.10%.

The household product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – No concerns.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The House Guard Legacy product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. House Guard Legacy is a core Ageas product were Ageas controls the policy wording. Ageas acts as the manufacturer of the household insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is mass market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score.  Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

House Guard Legacy is offered to customers both on annual payments and monthly via a Premium Finance facility.  However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor.  The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales fell slightly below expectations due to the restructure of product as it was split into two as per the simplification model, the cancellations remained consistent with a slight increase from 4% to 4.01%, there is not a concern that the product is not meeting the customer needs.

The loss ratio at 64.7%, claims frequency at 2.98%, claims repudiation 13.02 %, and claims acceptance at 71.18% is evidence that the policy is serving customers well when they want to claim, and are all areas that are performing above the average for similar products.  This is coupled with a low level of complaints, also a positive. During the claims process 43.01% of customers walkaway and do not carry on with a claim, this has increased slightly since the previous year of 14.91%, however, with household insurance often customers make contact to check the cover in place, but then proceed to not make a claim after discovering the value to repair or replace is inexpensive, thus not requiring insurance. This is not an indicator that the claims journey or process is not providing value, and raises no concerns regarding the value of the product at this stage.

The average premium that customers pay is £91.88, with an average claim pay out of £1627.66. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 17 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas household products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees.  The average commission charged is 23.9% with a boundary in place of now of 15-20% to avoid customers being charged excessive commission. The combined operating ratio for the scheme/product for 2021 was 92%.

The household product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive. 

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price.  The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case. 

The rating therefore for the scheme is Green – No Concerns.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

Optima Classic Bike product is predominantly distributed online by a variety of brokers. The product is sold through aggregators, online and over the telephone. Optima Classic Bike is a product where Ageas controls the policy wording and acts as the manufacturer of the motorcycle insurance. Ageas does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is riders aged between 19-75 years old, looking for comprehensive or TPFT cover for privately owned/leased motorcycle valued up to £100k (Comprehensive) & £5k (TPFT).. There is an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Classic Bike is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed, and any appropriate actions are taken.

During 2021 the policy sales remained consistent which is positive and demonstrates a clear market for the product and that the market has been accurately targeted. Whilst this has increased, based on the full review, there are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations reduced from 10.44% to 9.36%, which is a good indication that customers are not facing barriers when looking to cancel. The increase observed is not to concerning levels and does not indicate diminished value.

The loss ratio at 67%, claims repudiation 0%, and claims acceptance at 100% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 30% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 26.79%, however, 66% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and therefore raises no concerns.

Whilst the claim frequency is low at 0.10%, the average premium that customers pay is £95, with an average claim pay out of £3291.99. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 34 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The average commission taken by the Broker is 17.5%. The combined operating ratio for the scheme/product for 2021 was 87% and broadly in line with strategic targets.

The Optima Classic Bike product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance, with a concern around the commission boundary. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. The fees for the product are low and do not present cause for concern. Ageas works closely with the brokers to ascertain that the fees and remuneration can be appropriately justified, and not excessive.

It is recommended that the commission boundaries are reduced to 0-50% in order to ensure remuneration stays within tolerance levels and as such, an action has been put in place.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided, action required.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Optima Classic Car product is predominantly distributed online and also via a call centre. The product is sold via many different brokers. Optima Classic Car is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is for enthusiasts who wish to use a classic vehicle as a secondary car, with an indication that there is a low level of vulnerability as shown by the Vulnerability Score. Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Optima Classic Car is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales were at the higher end of the expected range, increasing from 9026 in 2020 to 10,860 in 2021.There are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. The cancellations saw a positive reduction, dropping from 11.73% to 3.68%, which is a good indication that customers are retaining the policy post the cooling off period, and that it is meeting their needs.

The loss ratio at 31.8% claims frequency at 0.5%, claims repudiation 0%, and claims acceptance at 100% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 11.54% of customers walkaway and do not carry on with a claim, this has increased since the previous year of 9.82%, however 66% of the total walkaways were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value, and raises no concerns.

The average premium that customers pay is £116, with an average claim pay out of £2465.38. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 20 years to recoup to the amount of an average claim pay out vs average premium, and average tenure is only 2 years on Ageas motor products.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-27.5% with an average of 19.10%. The combined operating ratio for the scheme/product for 2021 was 134% which is higher than the expected of 62.7%, which whilst is ahead of strategic targets, is not surprising during Covid as second vehicles were used less frequently, whilst insurance was still a legal requirement.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the core product are very low, it is very likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Optima L product is distributed through intermediaries and is digitally traded on the CDL platform. The product is sold via many different brokers. Optima L is a core Ageas product were Ageas controls the policy wording. Ageas acts as the manufacturer of the motor insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is drivers aged between 19-30 years old, looking for comprehensive “top-up” insurance for a motor vehicle. The product is designed for customers holding a provisional licence and the vehicle insured must have separate annual comprehensive insurance already in place. Cover term can be between 1 and 6 months. The product is not suitable for customers who have had previous claims or convictions.

There is an indication that there is a moderate level of vulnerability as shown by the Vulnerability Score (34.23%). Whilst the score is moderate, there may well be vulnerability related to financial resilience (which would be managed by the broker). Due to the nature of the product, operating short term insurance, the vulnerability score is likely to be higher as the insurance commitment is shorter and because the drivers are younger and less experienced. There is no indication that the product is being sold outside the target market.

Optima L is offered to customers both on one-off payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021 the policy sales (612) were higher than the expected figure observed during 2020 (131). This was due to the effects of the coronavirus pandemic and subsequent national lockdowns which led to test centre closures preventing provisional licence holders from progressing towards full licences. As such, the requirement for temporary/”top-up” insurance for learners increased. Based, on the full review, there are no indications that the product or sales journey were not meeting the expectations of customers, or potentially driving the wrong sales behaviours. Due to the product operating short-term insurance, the product did not observe any cancellations during 2021. This is unsurprising and there are no concerns with this as customers have the opportunity to select their preferred policy term, and therefore, the requirement to cancel is greatly reduced. The product does not have a cancellation fee and as such, there are no concerns customers are facing barriers when looking to cancel.

The loss ratio at 54.20%, claims repudiation 0%, and claims acceptance at 100% evidences that the policy is serving customers well when they want to claim.

Whilst the claim frequency has observed a slight reduction from 0.8% to 0.17%, both reflect 1 claim during each underwriting year. With the spike observed in policies for 2021 due to the test centre closures mentioned above, and with the product still observing the same amount of claims in 2021 (1 claim) this KPI will naturally have reduced. This is not an indicator of diminished value, but simply that there were more policies, and a combination of circumstances (national lockdowns, test centre closures, less drivers on the road) that led to fewer claims. The product didn’t experience any complaints which is also a positive.

As there was only 1 accepted claim, no customers chose to walkaway and not carry on with a claim. This is a positive as it demonstrates that there are no concerns with the claims journey or process.

The average premium that customers pay is £426.78. During 2021 there was only 1 claim which had a pay out of £717.33. Although this figure is less than twice the value of the premium paid, it does not suggest diminished value as evidenced by the 2020 UWY. The 2020 UWY only experienced one claim valued at £7138.18. Therefore, it is clear that the product can provide exceptional value to its customers in the event of a claim and as such, the premium presents no value concerns.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The range of commission taken by the Broker is 0-15% with an average of 3.2%. The combined operating ratio for the scheme/product for 2021 was 85.6% which is lower than the expected of 102%. Whilst the COR has witnessed a reduction, there are no concerns that this is driven by excessive profits. It is evident throughout the review, that the product has experienced few and low value claims, which is driving the reduction from the 2020 UWY figure observed.

The core product, with the overall level of remuneration (includes fees, commission) being taken is rated Green, within tolerance. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. The fees for the product remain very low and do not present a cause for concern. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.

The Telematics product is predominantly distributed online, via call centres, high street branches and also via intermediaries. The product is sold via many different brokers. Telematics is a core Ageas product where Ageas controls the policy wording. Ageas acts as the manufacturer of the Telematics insurance but does not provide any add-ons which are sourced separately by the brokers.

The customer profile (target market) for this scheme/product is a niche market with an indication that there is a low level of vulnerability as shown by the Vulnerability Score (33.95%). Whilst the score is low, there may well be vulnerability related to financial resilience (which would be managed by the broker). There is no indication that the product is being sold outside the target market.

Telematics is offered to customers both on annual payments and monthly via a Premium Finance facility. However, Ageas is not the Lender for the Premium Finance, with this being managed by the distributor. The APR charged by the Premium Finance is managed between the broker and Premium Finance provider and whilst Ageas is not responsible, for those customers that receive an APR greater than 30%, a reminder is given to the broker on ensuring that the product offers value to customers, and their responsibility to ensure that this is assessed and any appropriate actions taken, has been provided.

During 2021, the policy sales have remained broadly consistent with the prior year, indicating that the market is being accurately targeted and evidencing a continued need for this product. The cancellations were as expected for a niche telematics product, whilst having increased from 22.55% to 24.24%. When a driver’s behaviour is monitored, and their premium is calculated based on driving scores, this can contribute to a higher cancellation rate than compared to standard motor business. In summary, there are no concerns identified with the cancellation frequency increase.

The loss ratio at 94%, claims frequency at 10.61%, claims repudiation 0.36%, and claims acceptance at 98.29% strongly evidences that the policy is serving customers well when they want to claim. This is coupled with a low level of complaints, also a positive. During the claims process 29.23% of customers walkaway and do not carry on with a claim, this has decreased since the previous year of 32.65%. Of the total walkaways 67% were due to a third party being at fault and therefore the claim was dealt by the third-party insurer. This is not an indicator that the claims journey or process is not providing value and therefore raises no concerns.

The average premium that customers pay is £776, with an average claim pay out of £3916.81. For those customers that need to utilise the benefits of the product, the premium is good value, as it will take 5 years to recoup to the amount of an average claim pay out vs average premium.

As detailed above the product is distributed by a variety of brokers who add a commission to make up the street price, and also charge fees. The average commission percentage (-3.8%) continues to evidence that the brokers are not receiving excessive profits. The combined operating ratio for the scheme/product for 2021 was 106.4% which is greater than the prior underwriting year 2020 of 87%. This increase is in favour of the customer and when paired with the renumeration rate it is clear the customer is able to achieve their financial objections with this product.

The Telematics product, with the overall level of remuneration (includes fees, commission) being taken is rated Green. Given the average premium, claims experience, and remuneration, the product offers value, as the customer is not being charged more for the product than the benefits being derived, and the COR is evidencing that no excessive profit is being made. Whilst the fees for the Telematics product are in line with other products sharing a similar target market, it is likely that brokers carry their own fees. Ageas works closely with the brokers to ascertain that this can be appropriately justified, and is not excessive.

Overall, customers are receiving good outcomes in relation to being able to utilise the product at point of claim, as evidenced by the metrics mentioned above. The distribution chain is not complex, and the costs versus insurance product commission is not excessive, to the point that the customer is paying an overinflated price. The premium finance APR, whilst Ageas is not responsible, should offer value and the brokers have been reminded that they need to ensure this is the case.

The rating therefore for the scheme is Green – value is being provided.

The Value Assessments have been completed in 2023, using 2021 Underwriting Year data.