Ageas Raises Profit Forecast Following Strong H1 Performance
Ageas Financial Performance Overview
By Mateusz Rabiega
Impact of Weather and Tax on Profits
(Reuters) -Belgian insurer Ageas raised its annual core profit forecast on Wednesday to as much as 1.35 billion euros ($1.58 billion), as benign weather and low tax impact in China helped it surpass market expectations.
Medium-Term Financial Targets
The group, which previously targeted 1.3 billion euros of net operating profit in 2025, ended the first half with 734 million in core profit, beating estimates by more than 10%.
The insurer's shares were up 0.2% by 0734 GMT, as J.P. Morgan said that results, while ahead of consensus, had been boosted by weather and tax related one-offs.
In its second-largest market of Belgium, the group has been spared extreme weather patterns that have proved an ever-growing thorn in the side of global insurers, while the impact in Europe remained unchanged from last year.
In Asia, its biggest market, it posted a surprising rise of 30% on the year in core profit, as a reduced tax rate helped stave off concerns about a slowdown due to low interest rates.
"Group contractual service margin (CSM), a key driver of future profits, is 8% below our forecasts," the brokerage said in a note, referring to a measure of unearned profits an insurer expects to recognise in future.
CSM fell to 6.8 billion euro from 7.2 billion at the end of 2024, as new business contribution declined due to a product-mix transition in China.
However, Ageas remained optimistic about the long run, updating medium-term targets as well.
It now aims to generate free cash flow of more than 2.3 billion euros by 2027, supporting plans to distribute more than 2 billion euros to shareholders over the period.
($1=0.8542 euros)
(Reporting by Mateusz Rabiega in Gdansk; Editing by Sherry Jacob-Phillips and Clarence Fernandez)
