The International ARAG Group has “defied the Covid-crisis” by posting significant growth in 2020, with gross written premiums up by 4.8% to €1.85bn in the period.
While premium income rose by 6.1% in Germany, exceeding the market average, growth in international business was more “moderate” at 3.1% due to the sharp decline in the travel-related Special Service Package business.
Nonetheless, its international legal insurance business continued to grow with premium growth of 6.8% and at the end of 2020, the ARAG Group had a total of 10.5 million policies in its portfolio.
In addition, its combined ratio improved to 87.6%, down from 88.7% in 2019, while claims expenses were “on a par” with the previous year at €935.6m. As a result of the strong premium growth, its claims ratio decreased “significantly” from 53.5% to 50.9%.
The cost ratio increased from 35.3% to 36.7% as a result of the dynamic growth, and income from capital investments was back at the normal level of previous years at €78.5m.
Across its legal insurance segment, the largest unit in the group, premium growth was 5.8% in Germany and 6.8% in international business. Meanwhile, the health insurance segment delivered a “particularly strong” premium gain of 9.4%, mainly driven by its new full-coverage health insurance rates.
The composite segment posted a decrease of 7.6%, mainly due to the negative effects of the pandemic on the international Special Service Package business.
Looking ahead, the group said its “very positive” business development is continuing in 2021. Premium income rose by 7.4% in Q1 to €575.8m, up from €536.1m the year before. In light of this, ARAG said it recorded its “best start to the year ever”.
The legal insurance business posted a 6.9% in the quarter, while its health insurance business continued its “dynamic growth course” with revenue gains of 11.3%. International business delivered an additional 8.5% in premiums in the 1st quarter.
Dr. Renko Dirksen, spokesman of the management board of ARAG SE, said: “Legal insurance is a crisis product. The key figures show: We deliver real added value for our customers and are in control of our business. ARAG is gaining significant new customers and at the same time is operating the business with growing profitability.
“In conclusion we can say that the ARAG Group is a company on the move at the beginning of the new decade. We continue to pursue ambitious objectives, and remain hungry for success. The pandemic crisis has done nothing to change this. On the contrary: we perform and we deliver. ARAG is expanding its customer base significantly even under difficult conditions – both nationally and internationally.”