March 10, 2010 / 7:11 AM / 9 years ago

UPDATE 3-Fortis returns to profit in 2009, unveils new name

* 2009 net profit 1.19 bln euros vs expected 1.18 bln

* To change name to ageas

* Cuts exposure to Greek, Italian bonds

* To pay dividend of 0.08 euros

* Shares up 3 percent

(Updates after news conference)

By Philip Blenkinsop

BRUSSELS, March 10 (Reuters) - Belgium-based insurance group Fortis FOR.BR returned to an annual profit, resumed its dividend and announced a name change as it sought a fresh start a year and a half after its dramatic break-up.

The financial services group, stripped down to become a pure insurer after a state-led bailout, said on Wednesday it would change its name to ageas and cautioned that the market environment remained unpredictable and challenging.

“We can only say the year 2010 has had a good start in terms of business activities,” Chief Executive Bart De Smet told a news conference, declining to give a more specific forecast.

De Smet said in a video statement Fortis had cut its exposure to Greek and Italian bonds, a source of concern for investors over recent months. For Greece the exposure was cut to some 3.5 billion euros from about 5 billion at the end of 2008.

Fortis shares were up 3.5 percent at 2.81 euros at 1435 GMT, against a 0.6 percent gain in the STOXX Europe 600 Insurance index .SXIP. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic comparing Fortis net profit and price performance

here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Fortis said net profit reached 1.19 billion euros ($1.6 billion) in 2009, helped by a 697 million euro one-off gain on the sale of a 25 percent stake in Belgian unit AG Insurance to France’s BNP Paribas (BNPP.PA).

The compares with a mammoth loss of 28 billion in 2008 and was in line with an average forecast for a net profit of 1.18 billion in a Reuters poll of 10 analysts.

Fortis’s insurance businesses recorded an overall profit of 456 million euros, up from 6 million euros in 2008, broadly in line with expectations.

Life insurance benefited from an overall market recovery, while profit for its non-life business more than halved due to larger household and motor insurance payouts in Belgium and more bodily injury claims in Britain.

Bank Degroof analyst Ivan Lathouders said the life performance met expectations, but non-life was hit harder than predicted. He added the 15 percent rise in embedded value, the value of future life earnings and net asset value, was positive.

Fortis will resume shareholder payouts with a dividend of 0.08 euros a share.


Fortis is the market leader in insurance in Belgium and its international division has a scattering of activities, notably in Britain, Luxembourg, Portugal and east Asia, making the group among the 20 biggest European insurers.

The group is to underwrite motor and household insurance for Britain’s biggest retailer Tesco (TSCO.L) and has teamed up with BNP Paribas (BNPP.PA) to take a majority stake in the non-life insurance unit of Italy’s UBI Banca (UBI.MI).

It has ended non-life in Luxembourg and its Russian activities.

Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October 2008, with BNP Paribas taking control of Belgian banking arm Fortis Bank and the Fortis brand name.

The break-up left Fortis as a pure insurance player with a stake in a portfolio of toxic assets and shorn of its Dutch interests, including the activities of ABN AMRO bought in 2007 just before the credit crunch struck.

Fortis said its new name ageas combined the AG of its Belgian unit, EA for its key markets Europe and Asia and AS for assurance. It would be put to shareholders at the end of April.

Separately on Wednesday, Dutch market regulator AFM said it had fined Fortis 576,000 euros for market manipulation and late release of information in June 2008 when Fortis said its solvency was strong. Fortis said it had filed an appeal.

The case is one of many pending criminal and civil proceedings and investigations into Fortis’s fall. De Smet said he hoped 2010 would deliver more clarity on legal issues. (Additional reporting by Ben Berkowitz in Amsterdam; Editing by David Holmes) ($1=.7350 Euro)

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