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Allianz is off to a strong start in 2018 delivering increased profit and underlying growth

Press Release   •   May 15, 2018 10:01 BST

Jon Dye, CEO
Allianz UK Financial Results Q1 2018 Q1 2017
  • Gross Written Premium (GWP)
£ 542.7m £ 545.0m
  • Operating Profit
£39.8m £37.5m
  • Combined Operating Ratio (COR)
95.2% 96.7%
Commercial Lines

GWP                                                   £ 291.4m     £293.6m

COR                                                         95.1%        97.7%

Personal Lines
GWP                                                   £251.4m     £251.5m


COR                                                          93.9%        97.9%

Chief Executive Officer, Jon Dye said:

“The company has made a strong start to the year with underlying growth of 3.2% and profit up 6.1% compared to the same period in 2017. This performance has been achieved whilst we prepare to transfer the business between LV= and Allianz. This underlines the company’s commitment to deliver a business as usual approach to trading during this time.”

In prior years our Engineering Inspection fee income was included within GWP. 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. We have decided to exclude the fee income from this year’s GWP figure, but the 2017 number remains as reported last year.

Commercial:

The underlying GWP increased by 6.0% and the COR improved by 2.9% compared to the same period last year, which represents an impressive start to the year in challenging market conditions.

A significant amount of hard work is going into the transfer of the commercial business which will take place at the end of the third quarter. Brokers will be hearing more detail on these plans in due course. The positive collaboration between the teams at LV= and Allianz is impressive and appreciated.

Expanding the underwriting appetite as a result of transferring the Commercial Lines portfolio from LV= is an exciting prospect and the process of setting up new agreements with 168 brokers has already begun. We are delighted to be working with a new cohort of brokers as we seek to grow our Commercial business.

During the quarter the business also launched a strengthened Property Owners Select proposition, introduced an e-traded Defaqto 5*rated small motor fleet proposition, and refreshed the commercial motor fleet products. Continuing to launch innovative solutions to market is another example of delivering for brokers during a period of intense activity caused by the joint venture with LV=.

Personal:

In Personal Lines the GWP has remained at the 2017 level which reflects the focus on transferring the home and motor business to LV=. The 4.0% reduction in the COR compared to the previous year is a very good performance.

The transfer of Personal Lines business between Allianz and LV= has already begun with the first tranche via Acturis for Car, Home and Van activated for 1 May quotes and 1 June inceptions. This shows the determination and hard work of our team in making sure the business meets its deadlines. This is particularly impressive during what has been an uncertain time for some of the people involved.Clearly this has been a difficult time but positive job opportunities have emerged. This includes redeployment to other parts of the business including the wider Allianz Group in Munich, as well as secondments and permanent transfers to LV=. We expect to see people transferring in both directions in the coming months.

We will continue to work hard to minimise the impact on the workforce and there is every confidence the eventual number of job losses will be considerably lower than the jobs at risk announced in January.

Elsewhere in Personal Lines, our animal health business Petplan continues to deliver good levels of growth and business retention rates are at a strong level in a very competitive market. There are now 53,000 more Petplan policies in force compared to one year ago.

Industry Issues:

The Civil Liability Bill is making steady progress through the House of Lords but there remains a long way to go before there is certainty on what the reforms will look like and before the implementation date is known. Consequently, discussions with brokers will continue on the consequences of increased personal injury costs caused by the reduction in the Discount Rate.

Conversations with brokers often turn to the topic of Brexit and how things will operate in the market when Britain leaves the European Union in March 2019. As more detail about the framework for providing cross-border insurance emerges, greater clarity will be provided on the plans to meet this challenge. In the meantime, brokers can be confident that Allianz will be in a strong position to offer cross border insurance solutions for their existing and future customers.

Jon Dye Concluded:

“The first quarter’s performance sets the business up for a promising financial year and we are determined to maintain our focus on delivering for our broker partners and customers.

“We pride ourselves on maintaining a consistent strategy and building relationships for the long-term. As we enter the remainder of the trading year, we believe brokers will reflect on the positive approach Allianz takes to running its business and the benefits our consistent approach brings for their own organisations.”

Jon Dye, Chief Executive Officer.

Notes for the Media:

1.The figures in this press release are all stated before the 40% Allianz Group quota share

arrangement. The quota share is in place for capital management purposes.

The local numberswill vary from those provided by Allianz Group largely because of fluctuations in the Sterling against the Euro exchange rate during the period.

2.Allianz Insurance 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 88 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 asset managers with third party assets of 1,448bn euros. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of more than 11 billion euros for the group.

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

Cautionary note regarding forward-looking statements

The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements. Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core

business and core markets, (ii) performance of financial markets (particularly market volatility,

liquidity and credit events), (iii) frequency and severity of insured loss events, including 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 including the euro/US-

dollarexchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and

(xi) general competitive factors, in each case on a local, regional, national and/or global

basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

No duty to update

The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.

3.Media Contact:

Mark Bishop, Corporate Communications Manager.

Contact Telephone Numbers:

Work - 01483 552731  Mobile - 07802 925053   Email - mark.bishop@allianz.co.uk

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 88 million retail and corporate customers. Allianz Group 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 Group is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 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 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the group.

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

Cautionary note regarding forward-looking statements

The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.

Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events, including 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 including the euro/US-dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

No duty to update

The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.

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