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ALLIANZ DELIVERS A STRONG PROFIT PERFORMANCE IN A YEAR OF CHANGE

Press Release   •   Feb 20, 2017 10:00 GMT

Company Results                                    EOY 2016                               EOY 2015

  • Gross Written Premium (GWP)          £2,141.0m                              £2,219.0m
  • IFRS Operating Profit                         £154.0m                                 £36.3m
  • Combined Ratio (COR)                       96.4%                                    102.6%


Statement from Chief Executive Officer, Jon Dye

Allianz has delivered a strong financial performance in 2016 in a year of considerable change for the organisation.

The 2016 profit of £154m represents the return to a strong ‘business as usual’ performance compared to the adverse weather affected result in 2015. The 96.4% Combined Ratio is a good result in competitive market conditions and underlines Allianz’s ongoing commitment to focus on writing for profit.

Gross Written Premium is down over the previous year but this was the expected outcome from the decisions to leave the direct motor and home markets and to take corrective rate action on the personal motor book.

In commercial lines the business did well to achieve GWP growth of 1.7% to £1,109m in extremely competitive market conditions. More importantly, the COR was down 10.5% to 91.9% which is an outstanding result.

Engineering continues to perform well with GWP up 5.2% and the underwriting profit reached a pleasing level. The investment in technology and the delivery of market leading customer service are positively influencing our performance in this market.

In personal lines the GWP was down 8.4% to £1,032m for the reasons previously mentioned. I am pleased to report that the COR fell by 4.5% year-on-year to 101.5% and if the run-off direct book of business is taken out, the COR falls even further to 99.4%. We expect this improvement to continue.

In Animal Health, competition is increasing as more players enter the market. Petplan continues to rise to the challenge and is the undisputed market leader with GWP up almost 10% and delivering a strong profit. Petplan is a highly successful business in the direct channel insuring more than 1.2m pets. The consistently positive feedback on service the business receives from its customers is a key reason for its performance.

Change was the stand out theme of 2016 and Allianz announced and delivered its own structural changes last year. The ability to adapt quickly is important because insurers must be flexible and innovative as well as solid and secure if they are to be successful in the long-term. It is also key that change within an organisation is well managed and well executed and I believe Allianz performed well across all these dimensions.

An organisation must also continue to deliver at the level its business partners and customers come to expect when it is undergoing structural change. I believe the company performed well against that expectation by:

  • maintaining loyalty leadership positions with Brokers in commercial and engineering as well performing strongly in personal lines
  • providing an excellent claims service to our commercial and personal customers affected by the severe weather in December 2015
  • successfully launching a number of new commercial propositions in the mid-corporate sector and updated the propositions on the e-trading platform QuoteSME for small to medium size businesses. Importantly, Brokers have reacted positively to these changes.
  • leading the industry in the removal of the Average clause for SMEs to tackle underinsurance in this sector and clarify what constitutes fair presentation of risk for the benefit of brokers and their customers
  • completing the successful sale of the AGF EL and PL business to remove a legacy exposure from the books
  • achieving Chartered accreditation with the Chartered Insurance Institute – the largest organisation to achieve this status with the CII.

In 2017, the priorities for the business will be profitable growth and delivering the Allianz Group Renewal Agenda which means:

  • making superior customer experience the top priority for all our actions
  • investing in technology to become a ‘digital by default’ organisation
  • creating superior margins, innovation and growth through the long-term investment in technical disciplines to achieve best in class performance
  • systematically exploiting new opportunities for profitable growth
  • reinforcing a culture where both people and performance matter.

We all live in an uncertain world but as part of Allianz we benefit significantly from the group’s clear strategy, its breadth of expertise and its robust financial position. I look forward to 2017 with considerable optimism because of the underlying strengths of the business as well as the capability of our people to meet the organisation’s challenging objectives.

Jon Dye
CEO

Allianz Insurance is one of the largest general insurers in the UK and part of the Allianz SE Group, the largest property and casualty insurer worldwide.

Around 85 million private and corporate customers rely on Allianz's knowledge, global reach, capital strength and solidity to help them make the most of financial opportunities and to avoid and safeguard themselves against risks.

In 2015, over 142,000 employees in more than 70 countries achieved total revenues of approximately 125.2bn euros.

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