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Press release   •   Feb 19, 2016 11:00 GMT

Business Performance - Key Points:

  • December Storms To Cost £93m
  • Strong Customer Performance During The Floods
  • Significant Large Commercial Losses In The Final Quarter
  • Impact of Private Motor Being Addressed
  • Best Ever NPS Customer Feedback Scores
  • Gross Written Premium Up 2.6%
  • Profitable Lines Delivering the Most Growth
  • Exposure In Unprofitable Lines Reduced

Company Results                                            EOY 2015                  EOY 2014

  • Gross Written Premium                                £ 2,219m                  £ 2,163m

  • IFRS Operating Profit                                   £41.3m                     £143.4m

  • Combined Ratio                                            102.6%                     97.6%

Statement from Chief Executive Officer, Jon Dye

2015 turned out to be a year with a sting in the tail. At the end of the third quarter, Allianz UK reported a Combined Operating Ratio of 97.9% and an operating profit of £102.8m. Unfortunately, the weather had the final say as storms Desmond, Eva and Frank battered parts of Britain during three weeks in December.

Clearly the impact of the weather losses on our profit performance is unwelcome but paying claims to help customers overcome unforeseen events is why the insurance industry exists. The current position is that Allianz has paid nearly £8m in interim payments to our customers and the estimate for the total cost of the three storms is £93m.

I was very pleased with how well the Allianz Claims teams dealt with such a dramatic increase in demand from our customers. Following storm Desmond, the number of claims calls from our Household and Commercial customers increased by 300% and 100% respectively. The contingency plans the business has in place to deal with severe weather events meant that we were able to reallocate resources to meet this demand. Within two hours of their claims coming in, 95% of customers had an appointment to see an Allianz representative. This is an impressive response and it is clear from the many letters, emails and phone calls from customers that the level of service they received has been appreciated. Everyone involved can take great pride in that feedback and it is clear that when our customers needed us most, we were there for them.

The extremely competitive conditions in both the Commercial and Retail markets continued, caused in large part by the market following an unsustainable pricing strategy for years when it comes to large loss events such as the weather. I am therefore pleased that despite the market environment, the business was able to deliver revenue growth. Overall, GWP was up 2.6% compared to 2014 with the general Commercial business growing by 2.9% (£1,091m from £1,057 in 2014) and the Retail business by 1.8% (£1,128 from £1,107 in 2014).

Both Commercial and Retail’s underwriting profits were affected by the storms. The £93m overall cost I referred to earlier is split £72.5m for Commercial and £20.5m for Retail. There were also some large losses in Commercial during the last quarter and Retail’s performance was affected by the challenges in its Private Motor book. As a result, Commercial delivered a COR of 102.4% and Retail 106.0%.

I have referred previously to the issues in our Private Motor account and we have been taking robust action to improve its performance. One helpful factor will be the significant market rate increases that were seen in the last half of 2015.

At the business unit level, Motor Fleet (+4.2%) Engineering (+5.6%), Legal Expenses (+11.8%) and Petplan (+12.3% and now a £350m business) all delivered profitable growth. In markets where achieving profitable growth proved to be more challenging, decisions were taken to reduce our exposures.

Putting The Customer First

While the storm was and will continue to be an important focus for the business, 2015 was also notable for other business activity.For example, putting the customer first was at the heart of key market leading decisions taken by the Commercial business last year.

The Insurance Act is widely regarded as one of the largest overhauls in the insurance market for more than 100 years. The overall objective of the Act is to improve transparency and fairness for customers and these are principles we embrace at Allianz. The reforms were published in February and insurers were set an August 2016 deadline to adopt the provisions within the Act. Allianz announced in November that our customers would be best served by adopting the changes ahead of that deadline and our Mid-Corporate and Engineering policies were revised accordingly. A key element within the Act relates to the fair presentation of risk. Consequently, we reviewed our question set for SME customers and announced to the broker community that providing full answers in ‘good faith’ will be regarded as a fair presentation of risk. We believe this solution provides peace of mind for both our broker partners and their customers.

In May, the FCA published its thematic review into the handling of SME claims. The review raised a number of points on how the process could be improved and highlighted the fact that 40% of SMEs could be underinsured. To address this problem, Allianz announced that it will no longer apply Average as a way of settling claims where the customer is underinsured. Instead, SME customers will have their claim met to the full sum insured level. This will help both the customer and protect the relationship with their broker. Being first to react and implement change in this way is one of the key reasons why our Commercial business is so highly regarded within its market.

Solvency II

In November the company also announced that we had received regulatory approval to implement our own internal model to calculate capital requirements under Solvency II. I am pleased that all of the hard work that went into the submission to the regulator has paid off because it means we will be able to make decisions based on the company’s appetite and capacity for risk, rather than it being imposed by a standard model.

Management Board Changes

Following the retirement of IT Director John Knowles, I took the decision to appoint Stephanie Smith and Jacob Abboud to the Management Board. Stephanie was promoted to the role of Chief Operating Officer (COO) having been with the company since 2009. Jacob recently joined the business as Allianz’s Chief Information Officer (CIO) and his vast experience in the IT field will be invaluable to the business.

The Future

The key themes of the Renewal Agenda announced by the Allianz Group Chief Executive will provide the framework for delivering our strategic plans and I will be talking more on this subject as the year progresses. Three key areas of the Renewal Agenda are True Customer Centricity, Digital By Default and Technical Excellence. I am pleased with our performance across these dimensions in particular.

The Group uses the Net Promoter Score (NPS) methodology as one measure of True Customer Centricity.The Group has set the target of 75% of Allianz businesses scoring better than the market average by 2018. I am pleased to report that the 2015 Allianz UK NPS results show that both Allianz Commercial and Engineering remained loyalty leaders, with General Commercial recording its highest ever NPS score. I believe the nationwide branch network is a key factor in these results and the commitment to serving brokers locally will remain a key part of our customer strategy.

The Retail business also retained first place, achieving the highest ever NPS score from brokers in this market. The market leading Petplan business continues to achieve a level of customer performance that the NPS scores suggest rivals that of Google. In the digital space, I reported last year that Allianz UK was making further investments to improve its capability. In Commercial the investments focused on delivering the Engineering Modernisation Programme and refreshing the market leading SME online trading platform. The improvements in Retail focused on enhancing its consumer facing online capability by improving the quote and buy facility on the website as well as adding a web chat facility.

I am pleased that Technical Excellence is a key element within the Renewal Agenda. As the industry knows, this has been a key focus for this business for more than a decade, primarily through our Underwriting Academy and Excellence in Claims initiatives. Training our people to be the best they can be is essential to achieving our strategic goals.

The Group has also publicly signposted its plans to achieve an annual growth rate of 5% EPS (Earnings Per Share) on average each year from 2016 to 2018 and delivering a total RoE (Return on Equity) of 13% in 2018 (adjusted to exclude unrealized capital gains and other items). These goals have implications for our business going forward.


2015 was a difficult year to be a general insurer for the reasons I have already outlined in this statement – but it is just one year. We are now looking forward and pursuing our 2016 objectives in the knowledge that the business is built on solid foundations and has delivered consistent and positive results over the long term.

Jon Dye

Chief Executive


Media Notes:

  1. 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 2014, over 147,000 employees in more than 70 countries achieved total revenues of approximately 122.3bn euros.

Media Contact: Mark Bishop, Corporate Communications Manager

Contact Telephone Numbers:

Work - 01483 552731

Mobile - 07802 925053

Email –

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 2014, over 147,000 employees in more than 70 countries achieved total revenues of approximately 122.3bn euros.

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