Legal expenses and assistance provider ARAG has reported a profit for the tenth consecutive year, following the recovery of some outstanding after-the-event (ATE) premiums and the continued success of its portfolio of before-the-event (BTE) products.
While the insurer has identified a number of significant challenges created by the ongoing global pandemic, its high solvency ratio and the strong position recently reported by the global ARAG Group put the business in a good place to overcome them.
ARAG’s gross written premium under management increased by more than 6% in 2019 to £40.1 million (2018: £37.8 million) and the insurer reported a pre-tax profit of £500,000 in the UK, generating a total of £3.7 million in profit for the ARAG international group.
Growth in the BTE market was strongest for its family and commercial legal protection products, while the ongoing recovery of outstanding ATE premiums began after the landmark Court of Appeal judgment in West v Stockport NHS Foundation Trust and Demouilpied v Stockport NHS Foundation Trust in July.
Last year, the insurer was also instrumental in the group’s acquisition and subsequent launch of ARAG Legal Protection in Ireland, which was completed in December.
“Our success in 2019 inevitably looks almost irrelevant in the light of the huge challenges facing our industry and the whole world amidst the continuing pandemic,” commented managing director, Tony Buss. “However, the decade of restrained growth and the strength of our international group mean that we are in the best possible position to confront them.”
“Clearly, trading conditions are going to be extremely difficult for most businesses and we have revised our expectations for 2020. We’re preparing for an increase in claims, especially for employment and commercial contract disputes, while the uncertainties of Brexit and the recently postponed implementation of the Civil Liability Act remain.”
“However, our teams have adapted exceptionally well to the new working world that we all have to accommodate, and the pandemic has highlighted the value of legal protection and assistance products. So, we remain cautious but optimistic about ARAG’s future success.”