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ALLIANZ MAKES A STRONG START TO THE YEAR

Press Release   •   May 16, 2016 10:04 BST

Business Performance - Key Points

  • Strong Combined Operating Ratio (COR)
  • 43% Profit Growth Over The Previous Year
  • Stable Gross Written Premium (GWP)
  • A New Business Structure Will Drive Long Term Success

Company Results                               Q1 2016               Q1 2015

  • Gross Written Premium                 £ 547.3m              £ 555.4m
  • IFRS Operating Profit                     £47.4m                 £33.2m
  • Combined Ratio                              95.9%                   97.7%

Statement from Chief Executive Officer, Jon Dye

I am pleased to report that Allianz has delivered a strong underwriting performance in the first quarter.The IFRS Operating Profit number for the quarter is 43.0% higher than at the same period last year, and the 95.9% COR compares well to the 97.7% reported at the same time a year ago.

The GWP Q1 performance is slightly behind the level achieved at the same point last year which reflects the underwriting action taken in private motor and the virtually flat rate environment in the Commercial Lines market.

Commercial business delivered an excellent COR of 89.9% in Q1 which represents the most profitable quarter for some years. The highly competitive environment in this market resulted in a relatively modest 1.9% GWP growth over the previous year to £282m. Despite these unhelpful market conditions I am pleased to report that the level of business retention remains very solid.

There have also been a number of changes to the Commercial product portfolio during the quarter which reflects the appetite to profitably grow the business. For example:

  • An increase in the capacity for Excess of Loss cover which allows brokers to purchase

    excess liability cover up to £50m per individual class of business

  • In a drive to expand the footprint in the mid-corporate sector, a new Print, Publishing and Media proposition was launched to the broker market
  • An updated range of products on the e-trading platform QuoteSME will meet the growing needs of small and medium UK businesses.

The Engineering business continues to deliver a good level of profit which is ahead of last year’s Q1 performance.

Turning to the Personal Lines portfolio, the COR of 101.2% for the quarter represents an encouraging improvement over the 2015 end-of-year figure of 106.0%.The corrective underwriting action we have taken is having a clear and positive impact on this result and the absence of any extreme weather has also been helpful.

The Personal Lines revenue number is down by 5.0% but this performance also reflects the corrective rate measures applied by the business.

Petplan continues to deliver an excellent set of financial results as it has done for some time and the Corporate Partner and the Legal Protection businesses are also contributing a useful level of profit.

The business is strongly committed to the personal lines broker channel and we will continue to actively engage with brokers on how we can work together to further improve growth and profitability.

The business has already announced some key decisions this year which are designed to make us an even stronger proposition going forward.Firstly, the sale of the AGF Employers and Public Liability business (subject to PRA approval) has removed a legacy exposure from our books which supports our focus on the future.

The business also announced a proposal to withdraw from the direct home and motor markets. This was a difficult decision because of its effect on our people but this channel had not delivered satisfactory financial results, and we could see no prospect of that situation changing in a timeframe that was acceptable. If the proposal goes ahead, the focus the business had on growing direct can be redirected 100% towards strengthening our profitable growth objectives through brokers and other channels.

The move to a single Commercial and Personal trading team is an exciting development which is full of possibilities. The new Technical team will also play a key role in co-ordinating the best underwriting and pricing capability right across the business.

In summary, the first quarter financial results are good and the revised business structure will support our ability to deliver a strong and sustainable performance in line with the Group’s Renewal Agenda strategy. It is early in the year but I believe the business is well placed to deliver a strong financial performance and I look forward to reporting on our progress over the course of 2016.

Jon Dye

Chief Executive

Ends.

  1. A media telephone conference call briefing with CEO Jon Dye will take place at 10:00am on Monday 16 May.
  2. A photograph of Jon Dye is available to download below.
  3. 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.
  4. Media Contact:

    Mark Bishop, Corporate Communications Manager,

    Tel: 01483 552731/Mobile 07802 925053/email: mark.bishop@allianz.co.uk

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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