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Allianz announces profit growth and a strong combined ratio

Press release   •   May 14, 2019 10:01 BST

Jon Dye, CEO
Financial Results:                        Q1 2019               Q1 2018
  • Gross Written Premium (GWP)           £ 493.5m                     £ 542.7m

Operating Profit                                           £ 51.2m                       £ 39.8m

  • Combined Operating Ratio (COR)            94.8%                      95.2%
Commercial Lines:
  • GWP                                                    £ 319.5m                      £ 291.4m
  • COR                                                         96.7%                            95.1%
Personal Lines:
  • GWP                                                      £ 174.1m                    £ 251.4m
  • COR                                                          91.6%                        93.9%

Results Commentary:

Commercial -

Gross Written Premium has increased by almost ten percent which reflects some degree of positive movement in underlying premium growth and the additional revenue generated by new commercial business following the joint venture with LV=. The level of new business from the transfer is at expected levels and we are grateful for the support of our Broker partners which we hope will continue as the process moves towards its conclusion in September.

At 96.7% the Commercial Combined Operating Ratio is good, but not at the level it was at this point last year. The property claims ratios are showing some of the strain of claims inflation running ahead of general inflation and rate. As we reported in the Q3 2018 results, the claims experience continues to be reminiscent of what we would expect to see when negative recessionary pressures force up claims frequency and repair costs.

Engineering Construction and Power had a strong quarter with income for inspection business being at its strongest for a number of years. This business is well set to build on its position as market leader and its expansion into a range of specialisms including renewable power and construction.

Personal -

The transfer of business to LV= and its effects on revenue have been referred to previously. Importantly, the retained personal lines business is delivering a very strong underwriting profit which is clearly demonstrated by the Combined Operating Ratio of 91.6%.

Petplan is the major driver of the Personal Lines financial performance and the world’s biggest pet insurer continues to grow year-on-year and deliver a strong profit. In 2019 the business in on track to deliver a range of digitalised services designed to strengthen its already first rate relationship with its customers.

Claims -

Launched in January, the “Defendant Hub” is a new digital proposition. It uses artificial intelligence to enable the company’s injury claims handlers to action Ministry of Justice Stage 3 claims at a single click of a button. The simplification of the process has resulted in savings of 30 minutes per claim and £137 in cost per case as well as improving the customer journey.

At a recent forum with Brokers we were able to share more examples of how technology is improving the experience for customers. For example, drone technology was used to discover the exact cause of a large commercial fire at one of our customer‘s premises. This necessary investigative process would have been hazardous for a person to carry out and take considerably more time. Using a Drone meant the claim proceeded more quickly which is clearly good news for the customer.

Chief Executive Officer, Jon Dye said:

“At the end of the first quarter Allianz as a whole has delivered a solid financial performance. The green shoots of a hardening market in Commercial are a welcome sign and reflect under- capacity and rising claims costs. There are a wide range of economic pressures facing insurers which together with the usual potential for severe adverse weather claim, means at this early stage in the year we remain cautiously optimistic that we will deliver on our profitable growth objective in 2019.”

Jon Dye.

Ends.

Notes for the Media:

  • Engineering Inspection and Special Services

In prior years Engineering Inspection and Special Services were included within the GWP and COR numbers. This has been reviewed in preparation for the introduction of the new International Accounting Standard for Insurance Policies (IFRS 17) which is effective from 1st January 2021.

The GWP and COR figures shown for Q1 2019 and 2018 exclude Engineering Inspection and Special Services. The GWP and COR figures reported at Q1 2018 were inclusive of Engineering Inspection and Special Services. 

The information contained in this press release relates to Allianz Insurance plc. Allianz Insurance plc is one of the largest general insurers in the UK and part of the Allianz Group.

The Allianz Group is one of the world's leading insurers and asset managers with more than 92 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 673 billion euros on behalf of its insurance customers. Furthermore our asset managers PIMCO and Allianz Global Investors manage more than 1.4 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold the leading position for insurers in the Dow Jones Sustainability Index. In 2018, over 142,000 employees in more than 80 countries achieved total revenues of 131 billion euros and an operating profit of 11.5 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements, such as prospects or expectations, that are based on management's current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements. Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Allianz Group's core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) the frequency and severity of insured loss events, including those resulting from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates, most notably the EUR/USD exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions including and related integration issues and reorganization measures, and (xi) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.

No duty to update

The Allianz Group assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.

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