Ageas Protect has been hit by a one-off impairment charge of £5.6m related to a subsidiary of non-advised protection firm Click going into liquidation earlier this year.
Money Marketing revealed in May that Fortis Life, which rebranded as Ageas Protect in January, was owed £900,000 in clawback by Click. The owed clawback was part of a payment plan to repay £1.2m of indemnity commission on lapsed policies.
Click cut over 50 jobs in its Manchester and Farnham offices in November as part of a company restructure that saw Click pull back from its term assurance offering.
The company made a further 80 job cuts in January with the closure of its general insurance business, with staff receiving no pay or commission for December.
It is understood subsidiary Click Financial went into liquidation in February this year.
As a result Ageas Protect suffered an impairment charge of £5.6m, pushing its 2010 results down 42 per cent from a pre-tax loss of £7.2m in 2009 to a loss of £10.2m at the end of 2010.
Managing director Martin Werth (pictured) says: “In the nature of indemnity commission, when a distributor goes out of business, you cannot clawback commission on lapsed policies.
“As a result we had to take an impairment charge, but we took the whole impairment charge for all expected lapses as well as lapses that have happened.”
Despite the loss, new annual premiums for Ageas Protect for 2010 are up 52 per cent from £14.9m to £22.7m.
At December 31, 2010, Ageas Protect had a 6.4 per cent IFA market share, compared to 4.3 per cent at the end of 2009.
The Ageas Protect business launched in July 2008. It now provides cover to over 120,000 customers, an increase of 90 per cent compared to last year.
Overall, Ageas UK made a loss of £24.8m, including costs from claims related to bad weather and acquisition costs of Kwik Fit Insurance Services.
Excluding bad weather events and one-off costs, Ageas UK made a pre-tax profit of £51.5m, compared to £17.3m in 2009.