Leading legal expenses insurance and assistance provider ARAG has reported double-digit growth in its before-the-event (BTE) business and a ninth year in profit, despite the challenging market conditions that still exist in the after-the-event (ATE) sector.
Overall, the company’s gross written premium under management grew by 8.6 per cent to £37.8 million (2017: £34.8 million) in spite of a large number of ATE premiums for successful clinical negligence cases that remain unpaid, but BTE legal expenses and assistance business grew by 14.2 per cent.
The growth in BTE business builds on the 17 per cent growth the company achieved in 2017 and resulted from the strong performance of ARAG’s relaunched commercial legal protection products and emergency assistance range, in particular.
The company has also seen a significant increase in business with other MGAs and the London Market, since opening a City of London office in 2016.
A profit before tax of £0.6 million was ahead of our forecast and would have been substantially higher but for the outstanding ATE premiums that ARAG expects to recover over the next 12-24 months, following the recent Court of Appeal judgement which has validated the company’s approach and pricing with regard to block-rated ATE premiums in clinical negligence matters.
“I am very pleased that we have been able to produce such a positive result in particularly difficult trading conditions for legal expenses insurers,” commented Managing Director, Tony Buss. “In recent years, we have seen numerous providers leave the market, especially from the ATE sector, but ARAG remains strong and continues on our path of stable growth.”
“In spite of significant challenges, in the form of both new legislation and intense competition from less financially stable operators, we have proven that our focus on innovation, flexibility and service delivers a proven recipe for our business partners.”
“While we continue to grow in numbers, strength and new markets in the UK, we are also supporting our international colleagues in some of ARAG’s new territories, in Australia, Ireland and Canada, bringing affordable access to justice to people all around the world.”